Focus on co-payments

Below is information about focus on co-payments

When individuals become members of a medical scheme, they do so with the expectation that they will receive adequate care whenever they need healthcare services, particularly in the event of a medical condition or emergency. Medical schemes provide this essential protection by pooling the contributions made by all members, which allows for effective management and allocation of funds. It is therefore vital that these funds are utilized judiciously, with appropriate measures in place to control and oversee the spending of the collective resources contributed by members. This document is designed to assist members in grasping the significance of co-payments in safeguarding their interests while also ensuring the long-term viability of the medical scheme.

The Council for Medical Schemes (CMS) serves as the regulatory authority for medical schemes in South Africa, with the primary mission of protecting the rights and interests of members. Any co-payment imposed by a medical scheme is outlined in the Scheme Rules, which must receive approval from the CMS. It is important to note that co-payments do not apply in the case of emergency treatments and may be waived in specific circumstances related to Prescribed Minimum Benefits.

A co-payment functions similarly to an excess payment that one might encounter with car or home insurance. In this arrangement, scheme members are responsible for covering a predetermined portion of their medical expenses, while the scheme is responsible for covering the remaining balance. This structure helps to ensure that members remain engaged and responsible in their healthcare decisions.

This co-payment can be funded from:

• Available medical savings upon request,
• Available HealthSaver+ funds upon request,
• The member’s own pocket.

The application of co-payments is grounded in the principle of fund pooling, where the contributions from all members are aggregated. The advantage of this pooling mechanism is that it grants access to a larger pool of resources when members are in need, rather than relying solely on their individual contributions. However, there is a potential downside to this system; not all members may use these pooled funds responsibly. Without proper encouragement to make thoughtful decisions regarding their healthcare needs, some members may misuse the funds available to them. By implementing co-payments, medical schemes can reduce the likelihood of unnecessary claims and encourage members to think critically about the necessity of the benefits they are utilizing.

Ideally, a fixed co-payment should be substantial enough to prompt members to reflect on whether they genuinely require a specific benefit, yet still manageable enough to avoid causing financial strain in the event that healthcare services are indeed necessary. This balance fosters a sense of responsibility among members regarding their spending of pooled funds, ultimately helping to maintain the overall usage of these resources at appropriate and relevant levels. Consequently, this approach assists in keeping member contributions as low and competitive as possible.

In practice, fixed co-payments are typically applied to benefits that are particularly susceptible to unnecessary spending or over-utilization. The determination of these benefits is based on an analysis of the behaviors of various stakeholders, including members, hospitals, general practitioners (GPs), and specialists. By examining patterns of increased use of specific benefits that cannot be justified by the health status of members, medical schemes can identify areas where co-payments may be beneficial. Furthermore, in cases where the scheme has established contracts with particular providers, such as a network of hospitals offering discounted rates, variable co-payments may be imposed if members choose to seek services from non-contracted providers, which do not offer the negotiated rates.