Getting screwed by over the counter medication

We realised that we have just hit our medical aid self-payment gap all of 2 and a half months into the year. It sounded completely wrong so we checked our records and it turns out a substantial portion of the amounts pharmacists submitted to Discovery was for over the counter medication which included our baby’s inoculations. My wife also pointed out that the over the counter stuff effectively extended our self-payment gap too. I thought about this for a bit and realised that we are effectively being double charged for over the counter stuff submitted to medical aid.

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Here is a hypothetical scenario:

  • Medical savings balance: R5 000;
  • Over the counter medication submitted to and paid by medical aid: R2 500;
  • Original self-payment gap: R5 000.

What seems to be happening here is that the over the counter submissions are deducted from savings and paid by the medical aid. So that is R2 500 less than we would have had available if we had paid cash for that medication instead. Fair enough, except what happens next is that the over the counter submissions of R2 500 is effectively added to the original self-payment gap, extending that self-payment gap to R7 500. Of course the self-payment gap is that amount you fund out of your pocket before the above threshold portion of your cover kicks in and covers some of your medical costs.

So, as I understand this, we pay R2 500 out of our savings because the pharmacists just submitted the charges to our medical aid (it also bothers us that our baby’s inoculations were considered over the counter – they probably account for a substantial portion of the over the counter submissions). We would have had to pay cash for that stuff anyway, had it not been submitted. At this point we have basically paid for the over the counter stuff, Discovery just paid it on our behalf and recovered the money from our savings.

Now, once we exhaust our savings, largely due to these over the counter charges, we find that Discovery has added the over the counter charge to our self-payment gap which means that we have to pay an additional R2 500 of medical expenses ourselves, in addition to the R5 000 self-payment gap we had originally. That is a double charge. We paid for the over the counter stuff when it was deducted from our savings and now we have to cover that amount again as part of an expanded self-payment gap. We could have saved ourselves R2 500 if we were just paying for our routine medical stuff ourselves.

Am I missing something? This seems like a bit of a problem in how medical aids work.

Paul

Enthusiast, writer, strategist, web developer, and photographer. Passionate about my wife, Gina and #proudDad.

  1. I know it’s different with a baby, but I did an exercise in the 90’s and discovered that the entire amount paid by my medical aid was covered in 1 month’s payments (mine and my companies). And that was the average over 5 years. If you don’t have a chronic illness, or an employer who pays a large proportion of the subscriptions, there is no way you can break even on MA. They simply cut you off. People say “aren’t you scared to not be covered”. I say, “Neither of us are covered, you just think you are”. I started a regular investment of my premiums about 10 years ago, and I’m probably better covered now than with any MA.

  2. Paul,

    Whilst I can’t comment on exactly how medical aids work, what I can tell you is that having a MSA with Discovery is a bad thing. Let me explain.

    Hypothetically, I have an MSA of R12000 per year and this increases my annual premium by a little more than R12000 per year. I gain absolutely nothing and actually loose a tiny bit because of admin overheads. I also loose because I don’t have that money in my account earning interest.

    The one and only single benefit I gain by having an MSA is the security of having a larger sum available near the beginning of the year if I needed it.

    I’ve cancelled my MSA and have a hospital plan only. I have the security of medical cover if I really need it for something major, everything else I fund out of my pocket. I then have Gap Cover which costs me less than a good bottle of wine and this will pay the difference between my medical aid’s shortfall and any specialist’s bill for in hospital expenses. In my case, medical aid pays R0 which makes the shortfall 100% of the invoice. Gap Cover pays for this.

    At the end of the day, I still spend approximately the same R12000 a year, but I spend it out of my pocket. Anything that’s going to be very expensive is covered.

    I hate medical aid…

What do you think?

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