By Aleesha Reddy and Shaun Burger
South African medical scheme members are confronted with the imminent changes in contributions and benefits that took effect on January 1, 2024. The escalating costs of health care in the country pose challenges for both medical schemes and their members, necessitating innovative solutions for managing affordability without compromising on quality care.
Understanding the landscape
In the face of the 2024 medical scheme contribution increases, it is crucial for intermediaries to guide clients through the intricacies of health-care financing. The diverse drivers of these increases, as illustrated below, demand a strategic approach to balance solvency, financial requirements, and member needs.
Addressing affordability challenges
With industry-average contribution increases ranging from 7.5% to 16.0%, members are grappling with affordability concerns, prompting potential downgrades and benefit limitations. These limitations, such as sub-limits and network restrictions, lead to inevitable out-of-pocket expenses for members.
In response to these challenges, gap cover has emerged as a practical solution to restore the value of members’ money. Businesses that provide gap cover services must provide a comprehensive safety net, offering benefits such as coverage for approved admissions, shortfalls for specialist consultations, and access to a wide network of facilities.
Financial intermediaries’ role
Recognising the challenging economic climate, financial intermediaries play a pivotal role in advising medical scheme clients. Rather than abandoning or switching schemes due to affordability constraints, the recommended approach is to supplement medical aid with gap cover. This strategic move ensures uninterrupted coverage with no waiting periods or breaks in cover.
Despite the rising cost of health care, maintaining coverage is paramount. Intermediaries are instrumental in helping clients strike the right balance between affordability and comprehensive coverage. By staying informed about health-care funding market developments and working closely with clients, intermediaries ensure their clients remain healthy and financially secure.
* Reddy is the head of product development and Burger is head of actuarial pricing and analytics at NetcarePlus.
PERSONAL FINANCE