As living costs surge, healthcare coverage can feel like a luxury, particularly for young, healthy South Africans. Yet, amid policy debates on National Health Insurance (NHI) and private healthcare, medical scheme membership remains essential, offering crucial financial protection against unpredictable medical costs, writes Dr Rajesh Patel, Head of Health System Strengthening at the Board of Healthcare Funders (BHF).
With recent premium increases, many members feel the strain, leading some to consider downgrading their options or even opting out entirely. However, continuous medical scheme coverage is crucial for maintaining financial security and supporting long-term health.
Why are premiums increasing?
Reports by the Council for Medical Schemes (CMS) reveal that South African medical schemes collected R232 billion in premiums and paid over R218 billion in claims for approximately 9 million beneficiaries during the 2023/2024 period. These funds cover a wide range of healthcare needs, from hospital stays and advanced procedures to life-saving medications. Here are some of the main drivers behind rising premiums:
- Medical inflation and rising healthcare costs
Healthcare costs have consistently risen faster than general inflation, driven by advancements in medical technology, new treatments, and more expensive medications. Medical schemes must adjust premiums to keep pace with these rising costs to ensure adequate coverage for members.
- Increasing prevalence of chronic illnesses
Chronic diseases, such as diabetes, hypertension, and heart disease, are on the rise. These conditions require continuous and often costly management, contributing to higher-value claims and increased premiums.
- Deferred costs from COVID-19 relief measures
During the pandemic, many schemes held off on premium increases to ease members’ financial strain, creating a funding gap. Now, schemes are addressing this gap to maintain financial sustainability and ongoing access to quality healthcare.
The value of staying on your medical scheme
Downgrading or opting out of medical scheme coverage may seem like a quick way to save money, but it can lead to long-term financial risks and higher costs. Staying covered is essential for several reasons:
- Protection against high medical costs
Medical expenses can be unpredictable. Emergency care, surgeries, and specialist treatments can cost hundreds of thousands of rands. Medical schemes protect members from these high costs, ensuring access to care when it’s needed most.
- Avoiding late-joiner penalties and waiting periods
Members who end their membership and try to rejoin later can face steep late-joiner penalties, increasing premiums by up to 75%. The Medical Schemes Act of 1998 imposes these penalties to ensure fairness between long-time contributors and late joiners who seek coverage only when health issues arise. Staying covered avoids these penalties and maintains premium affordability.
- Access to preventive and wellness care
Many schemes offer preventative care, including wellness check-ups, screenings, and mental health support. Preventative care detects health issues early and lowers the risk of severe complications that are more expensive to treat, making it invaluable for proactive health management and long-term savings.
- Coverage for chronic and unexpected conditions
Medical conditions can develop unexpectedly, at any age. Continuous coverage ensures access to necessary care for both chronic and acute conditions, including lifestyle-related illnesses such as hypertension and diabetes. Staying on a medical scheme provides consistent access to treatment and management of these conditions.
Practical steps for selecting the right benefit option
If you are considering adjustments to your coverage, selecting a plan that balances affordability with essential benefits is key. Here are some strategies:
- Evaluate your health profile
Assess your current health, family medical history, and lifestyle. Healthy individuals may consider plans prioritising preventative care, while those with chronic conditions should choose options covering specialist visits, medications, and ongoing treatment.
- Focus on essential coverage
If premiums are a concern, consider plans covering essential hospital and emergency needs. These options provide high-cost protection without extensive extras, keeping premiums manageable while securing critical coverage. A consultation with your scheme or broker can help identify the best options for your budget and health needs.
- Participate in wellness programmes
Many schemes reward healthy lifestyle choices through wellness programmes, offering incentives such as discounts. Engaging in these reduces costs and encourages healthier living, adding financial and personal health benefits.
The long-term value of staying covered
Remaining on a medical scheme is about more than immediate healthcare needs; it’s about long-term security for both health and finances. Medical schemes offer peace of mind that, should an emergency arise, members are protected from the high costs of private healthcare.
The push for affordable, accessible healthcare for all
With rising healthcare costs, the BHF advocates for improved affordability and accessibility. To this end, it has engaged the Competition Commission to allow collective bargaining between schemes and providers, while urging the CMS to revise costly Prescribed Minimum Benefits (PMBs) to emphasise preventative and primary care.
Furthermore, BHF also calls on the Minister of Health to implement regulations under the Medical Schemes Act for a more affordable PMB package. Doing so will allow low-cost, basic benefit options that would expand medical scheme access, promoting healthcare and financial security across the country.
By prioritising accessible, affordable healthcare for all, we can lay the foundation for a healthier, more resilient South Africa where everyone has the opportunity to thrive.
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