Welcome back to Cover to Cover: Medical Schemes Explained, a column in partnership with Medihelp, helping financial advisers to break down the complexities of medical schemes, so clients can make informed decisions.
Read the earlier editions of Cover to Cover on decoding medical scheme plans, Prescribed Minimum Benefits (PMBs), waiting periods, medical scheme dependants, and co-payments.
In this edition, we explain how medical scheme members can maximise their medical savings to last longer.
Medical savings accounts: understanding the basics
How do medical savings accounts work, and how are savings allocated at the start of a new year?
A medical savings account (MSA) is a portion of your annual contribution that is set aside for day-to-day healthcare expenses such as GP visits, medicine, and basic dentistry. At the start of the year, your full annual savings allocation is usually made available upfront, even though you fund it through monthly contributions over the year. It is thus basically a credit facility made available at the beginning of a year. If a member resigns before the end of a 12-month period and they have used up the savings, they must pay the money back to the medical scheme. In essence, it is a loan.
What are the most common reasons medical savings run out prematurely?
Savings typically run out early because of:
- Frequent GP or specialist visits early in the year;
- Using out-of-network providers;
- Choosing branded medicines instead of generics;
- Paying for chronic medication from savings instead of chronic benefits; and
- Unplanned expenses such as dentistry, radiology, or optometry.
Spending behaviour and budgeting
What practical steps can members take at the start of the year to budget their medical savings so that funds last until December?
Members should:
- Review how they used savings in the previous year;
- Estimate known costs (chronic top-ups, dentistry, optometry);
- Divide their savings across the year (for example, set a monthly spending limit);
- Keep a portion aside for unexpected expenses; and
- Understand which services are covered outside savings.
How can members monitor and track their medical savings usage throughout the year to avoid surprises?
Members can:
- Check statements or online portals monthly;
- Use medical scheme apps to track balances and claims;
- Ask providers or pharmacies to confirm which benefit will be used; and
- Set calendar reminders to review savings at least monthly.
Cost-effective use of benefits
How important is it for members to choose generic medication where appropriate, and how much can this really save?
Choosing generics is one of the easiest ways to save. Generics are clinically equivalent to branded medicine but often cost 30% to 60% less, meaning fewer rand spent from savings and lower co-payments.
What role do network providers play in helping members stretch their benefits?
Network providers usually charge agreed-upon rates, reducing or eliminating shortfalls. Using network doctors, pharmacies, and specialists helps savings last longer and limits unexpected out-of-pocket costs.
How can members best leverage preventive care and screenings covered by their medical scheme to avoid higher costs later in the year?
Preventive care (such as flu vaccines, wellness checks, cancer screenings, and baby immunisations) can detect issues early and prevent costly treatment later. Members should understand what’s covered from risk benefits and use these benefits proactively.
Chronic conditions and ongoing care
For members with chronic conditions, what advice would you give about registering for chronic benefits and managing their related expenses correctly?
Members should register approved chronic conditions as early as possible. This ensures chronic medication and related care are paid from the correct benefit (not savings) and reduces long-term out-of-pocket costs.
What are the common mistakes members make when claiming chronic medication that depletes their savings unnecessarily?
Common mistakes include:
- Not registering a condition;
- Using non-designated pharmacies;
- Using non-formulary medication without approval; and
- Not renewing authorisations when required.
Lifestyle and other cost-saving strategies
What lifestyle changes can members make that can reduce their healthcare costs over the year?
Healthy lifestyle choices such as regular exercise, balanced nutrition, stress management, and quitting smoking reduce GP visits, chronic disease risk, and long-term healthcare costs.
What digital tools members should consider using to reduce out-of-pocket costs?
Members can use:
- Medical scheme apps and member portals;
- Telehealth or virtual GP consultations; and
- Pharmacy clinics for minor ailments. These are often cheaper and more convenient than traditional visits.
Fallbacks and contingency planning
How should members plan for unexpected medical expenses once their savings are depleted?
Members should:
- Understand what care is covered from risk benefits once their savings are used up;
- Keep an emergency fund for co-payments or exclusions; and
- Use networks and generics even more carefully later in the year.
Is gap cover worth considering for members worried about expensive procedures or shortfalls after savings run out?
For some members, yes. Gap cover can help to protect against large in-hospital shortfalls, particularly for specialists who charge above medical scheme rates. It’s important to understand limits, waiting periods and exclusions.
Communication and adviser support
What questions should members ask their advisers at the start of the year to ensure their savings strategy is optimised?
Members should ask:
- How much savings do I have and what does it need to cover?
- Which benefits are paid from savings versus risk?
- Which providers and pharmacies are in network?
- Am I registered correctly for chronic benefits?
What tools or resources can advisers share to help members plan better?
Useful tools include:
- Annual benefit summaries;
- Savings calculators or budgeting worksheets;
- Network provider lists;
- Preventative care checklists; and
- Step-by-step guides on chronic registration and claims
The bottom line
Maximising medical savings is not just about having money set aside – it’s about planning, tracking, and using benefits wisely. By budgeting monthly, choosing generics, staying in-network, leveraging preventative care, and managing chronic conditions correctly, members can stretch their savings, reduce unexpected costs, and get the most from their medical scheme all year round.
