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SA's No 1 Insurance Blog

So what’ it going to be – upgrade or downgrade?

It’s that time of the year where you get to choose your medical aid plan for the upcoming year. Will you choose to downgrade, or will it be an upgrade?

And if you’re unhappy with your current medical aid, and you don’t belong to a group scheme, a change of companies is on the cards – but be careful when doing that – speak to a healthcare broker first.

So here’s how Discovery Health works

With medical aid schemes you get four major types of plans:

  • Traditional plans,
  • New generation plans,
  • Hospital plans, and
  • Preferred Provider plans

Now I’m not going to get into a discussion on this suffice to say that Discovery Health doesn’t offer traditional plans.

New generation plans separate your day to day costs from the major hospital expenses. You get an allowance upfront for the year (known as your medical savings account or MSA at Discovery Health), and this is used to pay for expenses which are under your control. Depending on the plan you choose, once your medical savings account runs dry, you are faced with the following:

  • A gap during which you must pay your own expenses (Known as a self-payment gap),
  • You must pay all further expenses out of your own pocket, and in case of emergencies
  • Visits to a GP in the Discovery network as often as needed.

So quite simply, if the plan you choose contains any of these words:

  • Executive
  • Comprehensive
  • Priority, or
  • Saver

Then it’s a new generation plan with a savings element.

In 2016 they introduced a hybrid option known as the Smart series. Basically, it’s a hospital plan which allows you to see doctors when needed. Discovery gets to decide which hospital and doctor – you get to pay a small fee for the pleasure.

If your plan contains the word “core”, then it’s a hospital only plan – no doctor visits.

But just to throw a spanner in the works, Discovery Health also offers a product called “KeyCare”.

So what I like to do is split their range in two:

  • Anything with the words, Executive, Classic and Essential plans on one side, and
  • Anything with the word KeyCare on the other.

Got it? We’ll look at KeyCare in a later post.

Let’s now take a look at the Discovery Health new generation plan ranges

Here’s how the plan ranges stack up from best to worst, or if you prefer, most expensive to least expensive (or from the ‘very sickly’ to the ‘very healthy’):

  • Executive plan
  • Comprehensive series
  • Priority series
  • Saver series
  • Smart series, and
  • Core series

The first three plan series (Discovery calls them series because each of them has more than one plan option which we’ll discuss below) all offer an ‘above threshold benefit’ which means Discovery Health picks up the tab after you’ve jumped the self-payment gap.
The Saver plan range has no such benefit, and once you run out of medical savings, that’s it, besides the visits to a Discovery networked GP.
The Smart plan range is a hybrid in that it’s something of a hospital plan, and something of a ‘pay as you go’ plan should you wish to see a doctor.
The core plan ranges are for hospital cover only as mentioned above.

Plans within plan ranges

You’ll notice I spoke about ‘plan ranges’ above. That’s because on certain of the plan ranges, there are a number of options from which to choose.
These options are:

  • Classic (with or without medical savings account)
  • Classic Delta
  • Essential
  • Essential Delta, and
  • Coastal

Once again these work downwards from most comprehensive to least comprehensive or more expensive to least expensive. Okay, Coastal doesn’t quite fit into the pigeonhole, but more on that later.

The difference between Classic and Essential

It boils down to the Discovery Health Rate. Each medical scheme has something similar usually known as a medical tariff rate.

I’m sure you’ve read somewhere that in the event that you end up in hospital, you’re covered for 100% of the hospital bill. Most of us understand this to mean that 100% of our hospital bill will be paid in full. This is not a correct interpretation.

In practise, what happens is that each scheme determines their tariff rate for a procedure. Take a tonsillectomy for instance; Discovery Health might conclude that the cost for such a procedure is R10, 000. This then becomes the Discovery Health Rate or DHR.

100% of the Discovery Health Rate is then R10, 000 for a tonsillectomy. In reality, the procedure could end up costing R15, 000 which is why you find certain plans offering 200% of the Discovery Health Rate. In other words, up to R20, 000 cover.

With Discovery Health, the plans offer the following levels of cover:

  • Classic 200% of the Discovery Health Rate, and
  • Essential100% of the Discovery Health Rate

So if you can afford it, Classic provides more cover than Essential. If you can’t, then there’s good old medical gap cover to take up the slack.

To ‘Delta’ or not to ‘Delta’?

Delta simply refers to a networked hospital option or a designated service provider. What happens is that Discovery Health negotiates cheaper rates at certain hospitals, and then passes this discount on to you, the patient.
In return you, the member, elect to make use of these networked hospitals for any elected surgery.

Failure to use these hospital results in a hefty R7, 650 co-payment during 2018. Certain gap cover plan will take care of this, or at least a major portion thereof.

So what’s important when considering a Delta option?

Consider the family having a baby:
Their doctor refers them to a gynaecologist. The question arises, “Does the gynaecologist they’re seeing, operate out of one of the networked hospital options?
If not, they’re going to either have to:

  • Find a different gynaecologist, or
  • Pay the R7, 650 co-payment

It also doesn’t help choosing a Delta hospital if one isn’t conveniently located for you.

The other question which always comes up is: “What happens in an emergency?
Relax; the co-payment only applies to authorised procedures, not emergencies. In an emergency let them rush you to the nearest hospital in order to stabilise you.

Is there any benefit in using a Coastal plan?

Four of our provinces fall into this category:

  1. Kwazulu-Natal
  2. Eastern Cape
  3. Western Cape
  4. Northern Cape

These plans offer 100% of the Discovery Health Rate but you must use one of the coastal hospitals for your procedure. Using any other hospital will result in them not paying in full. Using a hospital in say, Gauteng for instance, would mean them only paying 70% of the hospital bill.

Coastal Saver is:

  • Cheaper than Essential Saver but
  • More expensive than Essential Delta Saver.
  • However, it offers a much larger medical savings account than the Essential plans. That’s because the contribution to savings is 20% rather than the 15% on the two Essential options.

Coastal Core is:

  • Cheaper than Essential Core while
  • More expensive than Essential Delta Core.
  • The Essential Delta Core option allows use of more hospitals countrywide compared to Coastal Core which limits choices to the coast.
  • But it does mean that if you live at the coast, then you can use any of the coastal hospitals versus Essential Delta where your options are limited.

In the next article we’ll briefly look at KeyCare before moving into more detail on the individual plan types.

Until next time.

The InsuranceFundi team