Choosing the right medical aid cover

Choosing the right medical aid cover for you and your

family is very important. There are many options to choose

from and before you make a decision, you may need to ask

yourself a few questions.

How much can you afford to spend?

When deciding to join a medical aid fund, first ask yourself

what you can afford to spend on the monthly premiums. If you

need to see a dentist, you’ll want a policy that pays for it. If you

need an operation you’ll want to be booked into a private ward

in the best hospital in Namibia. But are you willing to spend

N$10,000 per month for such a benefit privilege? If your budget

is between N$1,000 and N$1,500 a month, it is always best to

choose a benefits option that is affordable. Knowing how much

you can spend reduces most of the work.

What medical cover do you need?

Medical aid cover is broken down into two parts:

• In-hospital expenses (which happen while admitted into a

• hospital) and

• Out-of-hospital-expenses (doctors, dentists and over the

• counter medication).

Without knowing what you need from medical aid cover,

you will not know which medical aid benefit option to choose.

Therefore you will need to ask yourself the following questions:

How much did you spend on day-to-day medical expenses

during the past year?

How much did you spend on visits to the doctor – N$3,000?

Hospitalisation – N$0? Dentistry – N$5,000? Medicine –

N$2,000? If you already belong to a medical aid fund, it’s even

easier. Just ask them to send you a copy of your claims history

for the last twelve months;

Which of those expenses where once off and which won’t

come up again soon (like maternity)? Which are likely to come

up again and again (Like the flu)? Twice a year you should see

the oral hygienist, so this needs to be included in the budget.

Can you pay on your own out-of-hospital expenses?

If yes, then look at medical aid fund options that just covers

your hospital requirements;

If you don’t have enough money, then consider a medical

aid benefit option with a savings account (MSA) attached to it.

More information can be found by reading the out-of-hospital

cover section of this article.

If you find that you do not use the medical aid as much and

is unlikely to claim unless you need a serious operation, then

all you need is a simple hospital benefit option. If you run out

of savings by March, then you need a plan with much higher

savings. For example, a 20 year old who hasn’t seen a doctor

since the day his mother gave birth to him needs something

quite different from the 50 year old with high blood pressure

and diabetes.

The younger you are, generally, the healthier you are. That

means you may need less coverage. The older and sicker you

are, the more medical aid cover you need.

Membership and reserve level

Accumulated funds (reserves) is the net asset value of medical

aid funds, and must be maintained at the minimum prudential

required reserve level (“reserves level”), i.e. 25% of gross

contributions. It is very important to look at the medical aid

fund’s membership status and reserve level. Some funds have a

big membership base, but their reserve level is far below or close

to the prudential minimum required level of 25%. This means

the fund is likely to have a bigger premium increase at the end of

the year. Reserve levels may drop annually, should a fund have a

bad claims experience that year.

Other funds’ membership might be small, but the reserve level

is high, which means enough funds are available and premium

increases at the end of the year can be expected to be lower than

the average in the market.

Administration

It is important to know who the Fund Administrator is and how efficient they are in offering assistance, client services and

paying out claims.

In-hospital benefits, exclusions and co-payments

Before deciding on which medical aid fund benefit option

you want to join, you have to look at the cover each one offers

you. The most important question is, how are you covered in

hospital?

Most medical aid funds benefit options cover you at 100%

or more of the Namibian Association of Medical Aid Funds

(NAMAF) tariffs. Other options cover you at 120%, 150%,

200% or even 225%. This means it is always vital to negotiate

rates with the medical provider (anaesthetist, specialist, doctor,

etc.) If you don’t do that, you will be liable for the difference in

costs. The other option is to take out an additional product to

cover that cost, like additional insurance cover.

ALWAYS read the small print. Study your product brochure

to make sure of what is excluded on your option. Some medical

aid funds will exclude joint replacements or neck and back

operations, so it is VERY important to take note of exclusions.

You will then know exactly what you are covered for and what

is not included in your package, so that you are not caught off

guard.

It is also important to be aware of all co-payments. Many

medical aid funds have co-payments (i.e. covered from your

pocket) on certain procedures, like gastroscopies, laparoscopies,

removal of wisdom teeth, colonoscopies and joint replacements.

Co-payments differ from fund to fund and also depend on

whether the procedure is done in or out of hospital.

Out-of-hospital cover

Some medical aid fund benefit options in the marketplace

work with “savings”. These are called New Generation options,

where you are given a percentage of your monthly premium

upfront for the year. This is available to you immediately,

depending on the applicable waiting period.

These “savings” will be used for almost everything outside

of hospitalisation and also for any co-payment you might have.

Once the savings have been depleted for the year, you will have

to pay for the out-of-hospital expenses out of your own pocket.

Chronic medication

When it comes to chronic medication, first make sure it

is covered on the option you want to join. Ensure that your

condition is regarded as chronic and that the medication you

use is also covered. Most people join an option because it covers

their condition, but when it comes to the medication, the medical

aid fund says it is not on their formulary and is not covered. They

will then request you to use an alternative. If that is not possible,

they will pay you the Namibian dollar amount for the alternative

and you will be liable for the difference in cost.

Oncology, dialysis and HIV

You also have to make sure how the medical aid fund and

option cover oncology, dialysis and HIV. Most medical aid funds

have specific benefit programmes for these conditions, which

offer good cover, but it is important to make sure exactly what

that cover is. - www.namfisa.com.na

Did you know?

No cover

All medical aid funds have a list of treatments, medicines and procedures that they will not cover.

Health tip

Medical insurance comes at a substantially lower cost than medical aid.

Health precaution tip

Consider your family’s medical history when making this decision.

STATS

Advantages of medical aid:

•Financial protection if you suddenly have to pay large, unexpected medical costs.

*No delay in your medical treatment.

•Better medical care because you are treated by private doctors, specialists and hospitals.