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SA's No 1 Insurance Blog

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Would you trust me with your blank, but signed, cheque?

Okay, okay, I realise that cheques are a lot like cassette tapes – disappeared a long time ago in the eighties – so let me put it another way for you…
Who would you trust with your debit card and PIN number?

I mean think about it. Your car has developed a rattle under the hood and so you take it in to Harry, the local mechanic around the corner. Harry hums and haws for a few minutes and then says he doesn’t think it’s anything major. But just in case he needs to buy spares, he asks you to leave your debit card and PIN number with him.

Without batting an eyelid you say: “Sure, no problem. Just remember to use an ABSA ATM.”

Does that sound like something you’d do? No way, Jose. I bet you’d run a mile…in the other direction.

But I know someone you’d be willing to give a blank cheque to

Your doctor. That’s right, your doctor. Any other person besides your partner or child, and you’d tell them to take a short walk off a very long pier.

The truth is you’re not being told the whole truth

I guarantee that if you pull out your medical aid plan brochure you’re going to find  it says something like this:

  • unlimited private hospital cover

Then it will also say something like “In hospital costs are paid at one of the following rates”:

  • 100% of the health scheme rate
  • 200% of the health scheme rate, and on the really ‘good’ (read ‘expensive’) plans
  • 300% of the health scheme rate

So what assumption would you make when reading the “100% of health scheme rate”?

I bet you’ve assumed that every last cent of your hospital bill will be paid in full, correct? After all, you do have unlimited private hospital cover and you are covered at 100% of the cost. Well you’d be absolutely wrong in assuming that!

What they’re actually saying to you is: “We’re willing to pay 100% of what we think the hospital bill should be as determined by our panel of medical doctors.”

Of course the actual doctor doing the procedure has other ideas.
He or she doesn’t give a hoot what your medical aid says the hospital bill should be. All he knows is that he has ten operations lined up each and every day including Sundays, and if you want to be one of those fortunate ten, then you’d better pay for their time.

But here’s where things go sour.

Neither the doctor or the medical aid will tell you the actual cost unless you ask. When you call your medical aid and tell them you’re going in for an op, all they say is it’s been ‘authorised’. What does that mean anyway – authorised? They have no intention of paying whatever the doctor presents to them (unless he’s willing to accept the fee they’re offering), so what exactly are they authorising?

So you say, “Cool. My appendix operation has been authorised and I’ve been booked in on the 17th,” and you walk away assuming your medical aid has agreed to pay for the procedure in full.

The doctor couldn’t be bothered to disclose any of this either. After all, it’s vitally important you have the operation and the last thing that should be on anyone’s mind right now is money, right?

So off you toddle to hospital and have the procedure. Three weeks after recovery the bills start rolling in and you have your first nervous breakdown.

So what kind of bills are we talking about here?

What I’m about to share with you are two actual claims dating back to 2014. Now this isn’t hocus pocus. I have enough of my own client’s claims to know that this is true. Let’s take a look, shall we?

Click on image to enlarge:

Spinal Surgery Cost

In this example we see the example of a 28 year old male who went in for spinal surgery. You will notice the three red blocks:

  • Charged – this is the invoice amounts submitted by the surgeon to the medical scheme
  • Tariff – this is the rate set by the medical aid for this procedure, and which was then paid to the doctor by the medical aid scheme
  • Benefit Paid – this is the amount paid in by the medical gap cover company to the client and which he used to pay the doctor

Let’s look at the second example.

Click on image to enlarge:

Brain Surgery Claim

Here we see a 16 year old female requiring brain surgery. Once again the three same blocks.

Take a moment to think of this.

Your medical aid isn’t telling you the whole truth and nor is your doctor. Both those procedures resulted in unpaid bills of over R100, 000. Without gap cover, these bills would have had to be paid by the families concerned. The way I see it, you have only a few options:

  •  Mortgage your home if you own one
  • Arrange for a loan from your bank if you qualify
  • Take it from your savings and investments
  • Take out medical gap cover at around R150 a month

Which option would you choose?

If you need any assistance with your insurance or investments, drop us a line.

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Kind regards,

The InsuranceFundi Team

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