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Johannesburg - The news that SA's second-largest open medical scheme has been placed under curatorship has been a rude wake-up call for many.
The Council for Medical Schemes (CMS) said alleged mismanagement and "corporate governance issues" persuaded it to push for putting the 27-year old Bonitas Medical Fund scheme under curatorship.
Last year, the CMS published a damning report on corporate governance at Bonitas, citing unauthorised overseas trips, as well as alleged improper relationships with suppliers and subsidiaries.
The CMS now wants the board to be replaced.
So, what should the 600 000 members of the fund do?
The curatorship apparently has nothing to do with the financial soundness of the scheme.
"Bonitas remains one of the best-performing schemes in the industry; its solvency ratio (reserves as a percentage of contributions) [is] healthy at well above the 25% required by the [Medical Schemes] Act," Registrar Craig Burton-Durham said in a statement.
Therefore, said CMS spokesperson Alexsandra Serwa, it's business as usual at the fund - although the council won't advise members whether they should stay or move to a competitor.
Reports that trustees at such a prominent fund were apparently wasting members' money on overseas trips and suspect dealings should, however, highlight the need for medical scheme members to do their homework.
How to pick a solid medical scheme
- Do research. Go to the CMS website for a list of the registered medical schemes.
All the different scheme options, benefits and prices are available from the schemes or are on their websites. Take a look at the annual report of the CMS, which contains detailed information on each fund.
Some of the key issues you should look at:
Solvency levels. This is the amount of money the scheme has in reserve. Schemes are required to have at least 25% of the amount of contributions they are receiving in their kitty. Also look at whether a scheme is running at an operating loss to claims ratio. This measures how much money is paid out in claims, compared to what is spend on administration and running costs.
Contribution increases. Take a look at increases in monthly payments over the past couple of years. Volatility should be a worrying sign.
Membership numbers. Look for trends - particularly downtrends.
Benefits. Your medical scheme should fit your needs. Take a close look at what a scheme will pay out - specifically for day-to-day cover, chronic medication and hospital cover.
Many of the benefits are expressed as a percentage of the National Health Reference Price List (NHRPL), a recommended guide of tariffs compiled by the department of health.
Healthcare providers generally charge more than the NHRPL, so if your scheme will only pay out 100% you will need to fork out a hefty co-payment (the difference between the doctor's bill and what your scheme will pay out).
It is also important to find out if your scheme places any restrictions on medication for chronic conditions that run in the family - like diabetes, high cholesterol, cancer or high blood pressure.
You can compare the benefits of medical schemes here.
- Talk to your broker.
There are more than 5 000 medical scheme brokers accredited with the CMS who can help pick the best scheme for you.
The broker will earn commission of a 3% of your monthly payment, or a maximum of just under R70 per month (payable by the scheme).
Choose a broker who is preferably independent and comes with good references. You can find out whether a broker is CMS accredited here.
- Find out who sits on the board of trustees.
Members need to realise they are shareholders of the scheme and that the money they pay each month ultimately belongs to them, said Serwa. Board members, of which at least 50% should be members, have to be accountable and comply with legislation.
If boards don't have the skills to oversee certain aspects of scheme management, they have to consult and get experts in to help, said Serwa.
Try to attend general meetings of your scheme.
- Read up on the rules.
Before you join a medical scheme, make sure you understand all exclusions and benefits. The Medical Sceme Act is also very specific about the benefits you are entitled to.
- Fin24.com