Fedhealth 2012 – NB Change to the Maxima Standard plan

I have a number of clients that are on Fedhealth and would like to bring their attention to a change that has a significant affect on their cover for 2012.

The change relates to the Maxima Standard plan and specifically to the percentage cover that the plan offers for specialists used in-hospital.  What Fedhealth decided was to decrease this to 100 % of medical aid rates for non-Fedhealth specialist partners. What they are doing is forcing members to make use of their specialist network.  If you choose to use an out-of-network specialist you will be liable for the charges in excess of the 100 %. 

The expected shortfall is easy to cover through taking out a top-up product of which there are many.  The ones that we make use of are the Stratum and Turnberry options.  I tend to focus more on the Stratum service offering as I am on it personally, and have had good experiences when dealing with and claiming from them.

What is top-up cover?
Top-up cover is medical insurance and is not a medical aid.  Medical insurance fills the gap between what your medical aid covers and what a provider charges, including what is discussed above. Medical insurance can also cover co-payments and deductibles that one incurs on specific procedures (invaluable if you are on Medihelp or Discovery’s Priority plans).  There are also options that increase sub-limits and provide excess cover for MRI & CT scans.  Prices for top-up cover ranges from under R 100 to around R 220 for the whole family.

The change that Fedhealth has imposed on us as members and service providers is quite unfortunate.  They were one of the flagship medical aid brands out there but have, in recent years, removed their uniqueness.  I still maintain that they are one of the better providers of medical coverage and their administration, by Medscheme, is one of the most reliable.  Their continual downgrading of their plans is frustrating.

So if you are on the Maxima Standard plan please consider taking out some medical insurance so that you can keep the freedom-of-choice that you are used to.  Having the top-up cover in place is a recommendation that I give to all my medical aid clients.  No medical aid covers everything and with a comprehensive medical insurance you will ensure that you cover all your bases.

Europe is making us sweat the future as COP 17 rolls into town

COP 17 is a world conference for the parties to the Kyoto Protocol as facilitated through the UN.  It is a huge deal for our country and will shine the spotlight on us.  Will this help our economy recover?  Doubtful, however it is an excellent marketing opportunity for Durban and Brand South Africa.  And we do need some branding with two well publicised issues receiving worldwide attention - Malema gate and the Protection of Information bill passing through parliament.  Positive coverage will do us a load of good internationally.

Another debt crisis – this time Europe

Euro debt issues are weighing heavily on world markets (including our own).  These issues were precipitated by downgrading of some Euro Gov’s debt from stellar to junk due to the focus US sub-prime crisis placed on debt investments.  PIIGS (Portugal, Italy, Ireland Greece & Spain) countries have suffered as rates on their debt have increased. Greece defaulted and will default again.  Eventually this debt will have to be written off.  The looming issue is Italy’s debt, which is 10 times larger than that of Greece. Italy has the third largest bond market in the world.  So a possible default is hugely concerning and will result in global market contagion, recovery from which could be extended and severe. 

Markets in general

Market sentiment is self-fulfilling since emotional reactions feed on themselves.  Negativity is being fueled by the perception that indebted governments will be unable to afford their repayments.  Which could happen, but investors don’t want to wait to find out, they’d rather get out beforehand.  Patience rather than reactive moves would decrease market volatility and increase stability.  However humans react on emotion so as such as long as there is this uncertainty out there, markets will remain volatile.

What we need is clear direction from our own government and those abroad.  With the ANC’s Mangaung conference looming in 2012 the waters will likely be even more muddied as the infighting (and Malema’s appeal) intensifies.  Barring another European debt default, developed markets should recover as they are able to increase interest rates through the recovery.  This would encourage those with cash to invest into their markets.

Offshore corporate results and financial statements are looking very strong.  Cash is bolstering the balance sheets of many companies and Pension funds.  This is earning almost nothing in cash and should, in time begin to filter back into the markets globally.  Warren Buffet has been buying companies for the last few years, and taking big bets on the recovery.  It’s a good omen if the ‘Oracle of Omaha’ is buying. 

A positive outlook however must assume that delinquent Euro states and ECB come together to make their plans work.  Corporate news from the US is better but developed markets are slowing.  This slowdown will affect our and other emerging markets as demand for our goods slows.  Single figure growth rates out of China and India will have further negative impacts on our markets.  Commodity markets are also being weighed down by Chinese companies destocking to boost their balance sheets.  So expect a tough beginning to 2012.