Putting control back in hands of consumers
Scheme’s members able to chose from a number of plans to suit their needs
Fedhealth has created a medical aid solution that puts control, flexibility and affordability back into the hands of members via a number of mechanisms.
A flexible network option means members are able to choose their own savings, without compromising on the quality of their medical aid benefits. An example of this is members who opt for Fedhealth’s flexiFED Elect product pay 25% less on their monthly contribution. In return they have a co-payment of R12,000 for all planned procedures. In emergency situations, however, members are not liable for a co-payment.
The scheme’s flexiFED GRID option, on the other hand, provides an 11% reduction in monthly contributions. The tradeoff for members, explains Fedhealth principal officer Jeremy Yatt, is that they are restricted to using the Fedhealth Hospital Network for any planned procedures.
“The hospital network consists of more than 100 world-class facilities across the country. Given more than 90% of the Fedhealth membership base lives within 10km of a hospital in the network, this makes the GRID option ideal for almost everyone,” says Yatt.
Members on this plan who choose to have a planned procedure at a non-network hospital are liable for a R12,000 co-payment. However, like the Elect plans, this only applies to planned procedures. In the case of emergencies, members will be treated at their closest hospital and won’t be liable for a co-payment.
Yatt illustrates the differences by way of example. “On flexiFED 3, a family made up of a principal member, an adult dependant and two child dependants will pay R6,671 per month, or R80,052 over the course of the year. However, if they opt for the GRID option and use a Fedhealth Network Hospital, they will only pay R5,934 per month, or R71,208 per year, a saving of R8,844 on their annual contribution.
“Should they choose the Elect option and agree to a fixed co-payment of R12,000 on all planned procedures at any private hospital, they will benefit from 25% savings on their monthly contribution. This brings their contribution down to R5,003 a month, or R60,036 a year, which provides a saving of R20,016 a year.”
Another differentiator for Fedhealth is the MediVault and Wallet system which has successfully turned the traditional medical savings account model around. Medical schemes in SA have traditionally charged members for day-to-day benefits from the beginning of the year.
Fedhealth, on the other hand, places a pre-approved amount in each member’s individual MediVault account at the beginning of each year to fund day-to-day medical expenses. The account works in the same way as a traditional savings account, although members are only charged for it once they use it and are provided with the option of paying back the amount used over a 12-month period at no interest.
Members are able to transfer the full amount or R600 increments to their Wallet to cover expenses. “This option means members can choose how much day-to-day benefit they want or need and only access it when they need it, which allows for a lower monthly contribution,” says Yatt.
Members enjoy the same amount of available funds in their MediVault, irrespective of whether they are on the main, GRID or Elect version of the flexiFED option in 2020.
The savings provided by a GRID or Elect option, says Yatt, can be used to fund day-to-day expenses rather than transferring funds from the member’s MediVault to their Wallet, or to repay existing MediVault transfers.
Another alternative is to reinvest these savings into other financial products.
A young and healthy person who is still making their way in the world may elect for nothing more substantial than a traditional hospital plan, says Yatt, advising that for these individuals flexiFED 1 is an ideal plan as it provides better benefits than most hospital plans, but with the safety net of the MediVault facility should they ever require it.
“They don’t have to pay for it if they never use it. In this instance, we’re aiming to provide affordability with builtin control and flexibility.”
However, families who are accustomed to having a medical aid scheme will in all likelihood have a good idea of how much day-to-day benefits they need every year.
“They will probably prefer simplicity so they simply transfer their entire MediVault allocation to their Wallet at the beginning of the year and their repayments work exactly as they would have with any other medical scheme,” says Yatt.
“Whatever approach members prefer, we’re providing them with the control,” he adds.