There are different ways that day-to-day medical claims can be paid:
- By the scheme
- From a “fund”
- From savings account
- Out of pocket
- From threshold benefit
By the scheme, or “from risk”
Every scheme (medical aid) now pays for at least some of day-to-day benefits. When a medical aid pays for a claim from its own funds, this is knows as paying “from risk”. It means that none of your day-to-day benefits are affected by the payment.
Examples of common day to day benefits that schemes can pay for:
- GP visits
- MRI scans
It is in your best interest to see what a scheme pays for from risk on your plan, and if it includes any preventative measures, you should make full use of them. Unused benefits to do not carry over into the new year.
Claims paid from a “fund”
A fund is different from a savings account. A fund is a special allocation of money that a scheme gives you for some specific benefits. It can be on a “per person” basis or “per family”. The medical aid then pays claims from this fund, as long as there is money available.
Usually, the scheme is very specific for what you can use this money and when you can use. For example, if your plan has a savings account AND a fund, the scheme will usually pay the claim from savings first, as long as there is money available. Only when the savings are depleted, will it pay from the fund.
Schemes have different names for this type of benefit, for example Compcare refers to it as “Annual Flexi Benefit”. At rehealth we just refer to this as a “fund” for clarity.
A payment from a fund can be considerd to be “from risk”. That means that PMBs can be paid from a Fund. This is an important detail, because it means that your fund might not be as “big” as you thought. For example, all plans need to pay for asthma medicine “from risk” (see above). But a scheme can pay for asthma medicine from a fund. That means that a benefit you would have gotten anyway, is now impacting your fund. Keep this in mind. (Not all schemes do this, so read your benefits carefully).
This is an account funded fully by you. It is 100% your money. The scheme gives you the full amount at the beginning of the year to use for day-to-day claims, and you pay it off monthly, as part of your premium. So basically you are getting an interest free loan.
However, even though it is your money, you still pay “a price” for the convenience of the upfront allocation. The medical aid can limit how much it pays for claims, and also what claims it pays for from savings. For example, some plans allow you to use your savings to buy over the counter medicine, and some do not. And all schemes that allow the over-the-counter purchase limit how much you can spend on it.
Most schemes will pay for a claim from savings at 100% scheme rate only, and you will have to pay the difference if the claim is higher out of pocket.
If you pay a claim out of pocket because your doctor requests an upfront payment, you can claim that money back from your savings account.
It is important to remember that PMB claims can never be paid from savings, and need to be paid from risk or from a fund (see above). The exception to this is if you do not use a Designated Service Provider. In that case, the scheme still needs to pay the DSP rate, and you pay the difference. More on that here.
Out of pocket
You will have to pay a claim out of pocket in these circumstances:
- Your plan has no day-to-day benefit
- You have run out of your day to day benefit
- The claim is higher than the scheme’s rate for that claim. You need to pay the difference
- There is an upfront co-payment for a benefit
- You are in your self payment gap
- The claim falls under your plans exclusion, and is not funded at all
It is important to save all your out of pocket payments, as they might be requested by your scheme or for tax purposes.
Threshold and Above Threshold Benefit (ATB)
Some of the premium plans have a threshold benefit, which is a benefit that “kicks-in” once you have spent a specific amount of money (the threshold) on day-to-day claims.
This threshold amount can be a combination of a savings account and out of pocket payments. The out-of-pocket portion is referred to as a “self payment gap”.
Once you reach the threshold, you will have access to the Above Threshold Benefit (ATB)
For example, let’s assume a plan gives you:
- Savings: R6,000
- Threshold: R9,000
- Above Threshold Benefit (ATB): R15,000
From the above, you can see that your self payment gap is R3,000:
((threshold) – (savings))
Once you have used up all your savings AND have paid the R3,000 out of pocket, your ATB will kick-in. The scheme will cover the next R15,000 worth of claims. Once this R15,000 is finished, you are back to paying out of pocket.
Some schemes have unlimited Above Threshold Benefits.
There are some important footnotes to all this, though:
- Not all claims accumulate to the threshold, even if they are paid from savings. For example, the scheme might pay for your over-counter medicine from savings, but will not count that to your threshold. That means that your self payment gap will increase by the cost of that medicine. In the end, you are paying for it out of pocket anyway
- Claims only accumulate to threshold at 100% scheme rate. So even if your scheme pays for a claim at 200% rate from savings, only the 100% rate will accumulate to threshold. Effectively, should you wish to reach threshold you are paying the difference out of pocket
- Claims from the Above Threshold Benefit are only paid at 100 scheme rate. If your claim is higher, you need to pay the difference out of pocket
- An unlimited Above Threshold Benefit does not mean that all your claims will now be paid, since schemes impose sub-limits on some benefits. Once you reach that sub-limit, the scheme will not pay more claims for that benefit, even if you have funds available