Top 6 reasons why you have to pay a levy on your medical aid?
There are many different Medical Schemes available in South Africa and each scheme has several medical aid plans. You’ve done your best to pick the right choice but you still seem to have to pay over and above your fixed monthly premium. There are several reasons why you have to pay a levy but we will look at some of the common ones below.
- You are not collecting from your DSP
- You have run out of benefits
- Your MSA is depleted
- You are in the self payment gap
- You are using the above threshold benefit
- The medicine isn’t in the Formulary
Let’s zoom in on each of the reasons. The devil is in the detail and the details will vary slightly depending on whether you are in a closed medical aid scheme or an open medical aid scheme and the plan you took under that scheme. Closed schemes are those that only offer membership based on a particular company that you work for e.g. POLMED for South African Police Service employees, GEMS for state employees, BankMed for bank employees, MBMed for Mercedes Benz (Daimler Chrysler) employees. Open schemes are those that anyone can sign up for. These include medical schemes like Liberty, Discovery, Bonitas, Fedhealth.
Designated Service Providers (DSPs)
A medical scheme will cover services provided by a particular pharmacy/ hospital/ doctor. People with car insurance will know this because they can only send their car to an approved body shop. If the doctor you went to isn’t within their network of providers then the scheme will not cover the expenses or they won’t pay in full. People taking chronic medicines must use certain pharmacies otherwise they will pay a penalty fee. People on POLMED must use MediRite, those on Discovery must use Clicks and those on MBMed must use Dis-Chem. Chronic Patients on GEMS can select any pharmacy but they can only change it every 6 months. Some medical schemes will say that you can only use a hospital within a certain hospital group. The 3 top hospital groups in the country are Life Healthcare, Netcare and Mediclinic. If you do not go to your designated service provider then you must pay a levy.
Traditional Plan Benefits
Traditional plans are plans that simply have funds allocated per category. Some examples of categories are doctor consultations, Specialist consultations, X-Ray, Lab tests, hospital cover, dentistry and optometry. In Economics they call it ceteris paribus which means with all things being equal this is great option. It’s a little like budgeting, you know exactly how much you have for each category. However, it also means that you could have 100% of the optometry benefit but you can’t use it for X-Rays. It only works if you use everything equally but doesn’t help much if you (for example) see the dentist more than the average person. Also, you lose what you don’t use. You could have R10 000 allocated for spectacles but if you don’t have eye problems then you forfeit the benefit. If your funds are finished for that category then you must pay a levy.
Medical Savings Account (MSA)
This speaks to new generation medical schemes with an MSA (Medical Savings Account).
Unlike traditional plans, the funds in the MSA do not expire. They roll over to the following year and accumulate with time. They can be allocated per person or allocated as a pool for all members (main member + wife + kids) on the plan. This works for healthy individuals but may not be the best for the sickly. I say this because on these plans everything (consultations, spectacles, dentistry, x-ray, lab tests, etc) comes out of the MSA.
The portion that goes towards your MSA forms part of your monthly premium. However, it is worth noting that funds are loaded in full in advance for the year (just like traditional plans). The funds aren’t loaded per month. This is a pro-rata amount if you join a scheme after January. By that I mean that a person who joins in January will have R12 000 for the year but if you join in July then you’ll have R6 000 for the 6 months left in the year. If your medical savings account is depleted then you must pay a levy.
The MSA has a specific amount allocated to it for any given year. However, the funds often run out before the year is over. Day-to-Day medical expenses must be paid out of the members own pocket until s/he reaches the amount that was calculated to be the annual threshold. This is called the self payment gap. If you want to know your self-payment gap then subtract the allocated annual MSA funds from the threshold at which the above threshold benefit applies. Let’s say your MSA has R12 000 for the year and your Above Threshold Benefit will start at R16 000, your self payment gap is R4 000. You must do this at the start of the year so as to get a clear picture. This means that you will have to pay out of your own pocket for medical costs adding up to R 4 000 before the Above Threshold Benefit will kick in.
Very important, when in the self payment gap you must ask your doctor, the hospital or the pharmacy to continue to charge items against your medical aid even though you know that your MSA is depleted. This way, the medical aid is aware that you are paying and automatically closes the gap with each rand paid out of pocket until you reach the threshold. If you do not do this then you will have to keep receipts and email them to your scheme. if you are in the self payment gap then you will have t pay a levy.
Above Threshold Benefit
There is something called an annual threshold. This is the amount of money that must be paid (whether from the MSA or from the members pocket) before the scheme will pay for medical expenses. Remember, your own savings have been paying before, not the medical aid. This differs from member to member also depending on the number of dependents and their ages. The medical aid will begin to pay for day-to-day expenses after the threshold has been reached. Put differently, the scheme will pay after the self-payment gap has been closed. This benefit does not cover Over-The-Counter medicines. If you are in the above threshold benefit then you will have to pay a levy for OTC medicines.
Medical Scheme Formulary
A formulary is a list of medicines attached to specific diseases. If the medicine that has been prescribed by your doctor or recommended by your pharmacist is not on the formulary then it won’t be paid because it is an exclusion. There are also gender and age exclusions. Certain medicines are only paid for females and others are only paid above a certain age.
A medicine in the formulary will have a price attached to it. This price is usually based on the cheapest generic. If you have expensive taste and want the brand product then you will be required to pay the difference between the two prices. This is called a levy.
Moreover, a medicine in the formulary might only be covered at e.g. 66% of the price. This means that the patient will have to cover the 34%. This is called a co-payment. These rules are different for each plan and for each medical scheme. Also, these don’t only apply to medicines but also apply to procedures, medical emergencies, etc. It will be stipulated in your membership that your plan will only pay so much for spectacles, tooth extraction, etc.
Prescribed Minimum Benefits (PMBs)
The Medical Schemes Council (MSC) has obliged medical schemes to provide certain defined benefits for specific conditions & situations. The list of Prescribed Minimum Benefits (PMBs) ensures that people receive the minimum health services required. These are medical emergencies, 270 serious medical conditions, 25 chronic conditions including asthma, diabetes, hypertension & epilepsy. These must be funded regardless of the plan a patient affords. The medical scheme must cover these in order to keep the people healthy and avoid emergency situations & expensive complications.
You must register your condition with the scheme and you must demand payment of some procedures depending on whether or not they are PMBs. Some schemes won’t pay for glucose strips until you have submitted evidence that you are diabetic. They won’t pay for your ARVs until you’ve submitted evidence that you are HIV +ve. They won’t pay for pregnancy supplements until you’ve registered as such with the scheme. If you do not comply then you will have to pay a levy.
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