Medical scheme benefits seem to be shrinking every year, unlike medical scheme contributions. It’s tough to pay high premiums every month and still have to foot the bill for your doctor’s visit. 

Here are things you need to know about medical savings accounts (MSA), how to stretch them, and what to do if they’re empty.

What are MSAs?

These are funds made available to you upfront – usually from January, which is the start of the benefit year for most people – to spend on day-to-day expenses, such as GP visits, specialist fees, or any other expenses as stipulated in your benefit option.

Read the benefits – wherever it says ‘subject to availability of funds in your MSA’, this is where payments come from. These can be anything from 15 – 25% of your contribution if you have a full medical scheme. Hospital plans don’t have MSAs.

Have MSAs always been part of medical schemes?

No. They were introduced about 15 years ago on many schemes, partially in an effort to reduce claims expenditure in response to sharp claims increases. Before the days of MSAs, many schemes did not limit day-to-day expenditure.

Check your benefit schedule – some schemes will still pay for certain costs, such as mammograms, or basic dentistry, even if your MSA is depleted.

Whose money is the cash in the MSA?

It belongs to the member, but cannot be withdrawn in cash. It can only be used to pay specified medical expenses, and if there is money left over in the MSA at the end of the year, it is carried over to your account for the next year. You will only be paid out in cash after four months if you resign from the scheme with a positive balance in this account.

Can I spend it all in January?

Yes, you can. Obviously it is not advisable and should not be done if it can be avoided at all, as you will have very little day-to-day cover for the rest of the year.

But between a nasty flu, a small sports injury, a visit to the gynaecologist, a new pair of glasses, and some once-off acute medication for an ailment, it is easy to watch your MSA dwindle to nothing.

Does this mean I have no cover at all?

No, you are still covered for chronic medication (26 conditions) and hospitalisation costs. But stuff like GPs and physiotherapists and antibiotics for a lung infection will have to be paid for by you until the new benefit year kicks in. Check your benefit schedule – some schemes will still pay for certain costs, such as mammograms or basic dentistry; even if your MSA is depleted. It differs from scheme to scheme and option to option.

Must I carry on submitting claims even if my MSA is depleted?

Yes. Many schemes have what they call a self-payment gap, after which certain benefits will be paid out again. If your MSA is R5000 for the year, and you have a self-payment gap of R4000, it could mean that your scheme will start paying certain benefits again after you have footed R4000 of your medical costs yourself (R9000 in total – R5000 MSA + R4000 self-payment gap). Unless you submit claims, your scheme won’t know when you are through your self-payment gap.

Try and avoid a situation where you pay R2000 per month extra for a full medical scheme contribution, but only get about R8000 per year of benefits for it.

How do I stretch my MSA to last as long as possible?

Visit the nurse at the pharmacy for things like flu injections instead of going to the GP. It is a lot cheaper. Ask the pharmacist for generic medicines as they are often a fraction of the cost.

Compare prices for medical services in your area – don’t just go to the nearest one. Do the same when choosing a pharmacy.  Use doctors and medical services that are contracted to the network of your scheme, as they are usually cheaper.

What about paying some of my own bills to make the MSA last?

This will only be a good idea if your scheme does not have a self-payment gap. Payments you make from your own pocket do not accumulate towards covering the self-payment gap if there is still money left in your MSA.

What happens if I need to see a doctor and there is no money in my MSA?

There’s no nice way of saying this: you will be paying for it yourself.

Make sure you have a rainy day fund that you can draw on in a crisis. At least you know if there is a real emergency, such as a car accident, you are covered for hospital expenses. If your MSA is empty, and your condition is not serious, you can wait until the new benefit year kicks in.

Otherwise you will just have to haul out the credit card. Always remember to tell the doctor you are paying for this yourself, as even doctor’s tariffs are negotiable.

Read more: Should you change your medical aid package?

Why don’t I just switch to a hospital plan?

It might be an option, and it will be cheaper, but then remember that you will have to pay all your day-to-day benefits yourself. Get into a habit of setting the money aside that you save on contributions so that you can do this.

Try and avoid a situation where you pay R2000 per month extra for a full medical scheme contribution, but only get about R8000 per year of benefits for it. It is important to study the benefit schedule carefully before you make this decision.

Can I deduct medical costs not covered by my MSA from tax?

If you submit a tax return, you can deduct R286 per month for your scheme contribution, and medical expenses that you pay yourself if you submit the invoices and receipts. 

Sources: The Council for Medical Schemes, Alexander Forbes Health, the South African Revenue Service, Genesis Medical Scheme