Changing from one medical scheme to another - effortlessly

With the cost of living increasing, many people find themselves considering a change of health plan or even a complete change of medical aid. 

While some medical aids will allow plan changes at any time of the year and changing plans within the current medical aid would seldom trigger waiting periods or exclusions, there are a number of factors to consider when changing from one medical aid to another.

Even if you have researched pricing and basic benefits, you should note that medical aids have very particular rules when joining. This article examines what to take into account before making a change.

Will there be a change-over waiting period?

While the cancellation process could be as simple as a phone call, keep in mind that there could still be money owed to your current medical scheme and option, with the day-to-day finance for the current year or period still outstanding. Medical aids will require that these funds be paid back if you cancel your plan mid-term.

The amounts can be paid off over a period, as agreed on with the scheme.

You should also take note of the change-over waiting period that comes into effect.

“In accordance with the Council of Medical Schemes rules, medical aids are only allowed to impose a 12-month waiting period if you’re joining a medical aid for the first time ever, or you belonged to your former medical aid for less than 24 months,” says Leon Vermeulen from Discovery Financial Consultants.

“If you have belonged to another medical aid for longer than 24 months, you are allowed to change your scheme without a waiting period, no matter what your condition. However, a medical aid can impose a three-month waiting period if you have a specific condition.

However, you will not have access to prescribed minimum benefits if you have not belonged to another medical scheme before, or if you have allowed a break of more than three months since ending their membership with a previous medical scheme. This can have repercussions – if, for example, you have a heart attack or a car accident, you may not be covered.

Which other exclusions are important to note?

New schemes have the right to exclude you, as a new member who did not have uninterrupted cover, from claiming for a specific condition for up to 12 months. For this reason, many people are discouraged from disclosing prior medical conditions at the inception of the policy.

But following the Momentum non-disclosure saga in 2018, where a hefty claim was initially denied due to non-disclosure of a medical condition, it has been reiterated just how important full disclosure is.

The claim was later paid out because the member did not die due to a medical condition. However, afterwards, Momentum issued a press release on the importance of full and honest disclosure at the application stage.

According to this release, all medical and health information needs to be shared during the application.

"Non-disclosure is a criminal act and it will never be deemed a financial advisor’s fault if this occurs,” says Vermeulen. “The member is expected to know and understand that every medical condition they suffer from must be noted. Non-disclosure can lead to your being banned from a medical aid for life.”

What will you need to produce at the inception of your new policy?

One of the most important things to remember when cancelling your policy is to ensure that you receive your membership certificate at the latest within a month of the termination date from the scheme you are leaving. If you’re unable to access this certificate an affidavit must be issued.

This is to confirm the length of your membership.

If you belonged to another scheme before, you may have to get a certificate from that scheme as well, if you don’t already have one.

If you are older than 35 and you are unable to prove continuous membership of a scheme, you may be charged a late-joiner penalty. You could face a 5% loading for the rest of your life if you have not belonged to a medical aid for four years after your 35^th birthday, according to Vermeulen. “For anything longer than four years, but less than 15 years, the penalty is 25%, and more than 50% over the 15-year mark,” Vermeulen says. “However, a late-joiner penalty can be waived if you join through a group scheme.”

A late-joiner penalty is added to your monthly contribution, is worked out as a percentage of the contribution, and is based on the total number of years a member has not been on a medical aid since the age of 35 years.

In addition, other typical documents you may have to provide, include:

• Identification document (ID)
• Payslip of the main member
• Marriage certificate, if applicable
• Access to medical history, including any relevant documentation

Serving your notice after termination

Most scheme options have a stipulated termination notice period. This outlines both the timeframe that needs to be adhered to as well as whether you’re expected to continue paying.

According to the Council for Medical Schemes (CMS) website, contributions must still be paid until the last effective date of membership. A member remains liable for full contributions for the whole notice period regardless of whether they serve the termination notice or not.

According to the CMS website, a medical scheme may institute legal proceedings to recover outstanding contributions or backdate the termination to the last date of contributions received. This may result in a reversal of claims already paid by the scheme during the notice period.

If the member had a savings account, the debt may be offset before the balance is transferred to the new medical scheme or paid out to the member if the member does not join a new benefit option with a savings account.

What to look for when changing schemes or options?

There are many reasons people may opt to change their cover. When doing so, consider the following:

Is the change in the best interest of yourself and your pocket?

 In other words, am I making a good decision that will in fact benefit me in the long term? Often people are motivated by wanting to pay less and they compromise their cover only to realise their mistake when it comes to the claim stage.

Is this enough cover? Make sure that you are not underinsured.

For example, this could mean that you do not have enough cover for the expected expenses of needing to be hospitalised. This is undoubtedly an expensive mistake to make.

Is this what your health needs?

Ensure that you understand how the benefit options operate and select according to your healthcare needs and what you can afford. The Prescribed Minimum Benefits (PMBs) must be included in every benefit option, according to the CMS website.

The registered rules of medical schemes fully disclose detailed information regarding the relevant benefits and contributions. It is essential that you obtain the rules of the scheme or a summary thereof to verify all information relevant to enable you to make an informed choice. Always consider the risks associated with cancelling a medical aid membership or switching to another option. Where possible discuss alternatives with your scheme before deciding to cancel. Your health is your most valuable commodity.