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Affordable Medical Schemes are Becoming Increasingly Important in South Africa

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With the economy still in the doldrums after the 2008 recession, the state health service is among the nation’s facilities worst hit by the crippling shortage of government funding. With many hospitals reduced to providing only primary care, it is a situation that seems destined to continue in the absence of a realistic contributory system to offset rising costs. The impact of the latter has also affected private healthcare, prompting a growing need for more affordable medical schemes in South Africa that will make it possible for more of its citizens to benefit from access to private medicine.

Under the terms set by the Council for Medical Schemes, the industry’s regulatory body, a fund is entitled to increase its premiums annually, subject to the body’s ruling on what represents a valid increase in the prevailing circumstances. Though private hospitals, clinics, specialists, and general practitioners all have a duty of care, they are also obliged to remain profitable if they are to continue meeting that obligation. When inflation forces the cost of medicines, disposables, capital equipment, and incomes higher, it means that special measures are required in order to ensure affordable medical schemes in South Africa.

If you take a close look at the items you buy regularly from your local supermarket, you will notice that the prices of some items have escalated dramatically, whilst in other cases, the increases may be more modest. Take an even closer look, and you will often find that the explanation is that, in exchange for keeping the increase to a minimum, you are now getting slightly less for slightly more. Similarly, one of the means by which some funds choose to keep their premium increases down is set lower limits on some of their benefits. The decision may be a financially sound one, but from the member’s viewpoint, it simply means increased liability for service providers’ fees in exchange for more affordable premiums from such medical aid schemes in South Africa.

Creating a balance that is acceptable both to the trustees of a fund and to its members can be a challenge, to say the least. If premiums are perceived as too high, prospective members will naturally tend to look elsewhere. Without sufficient members, however, the funds, which are all not-for-profit companies, would be unable to maintain sufficient cash reserves to guarantee meeting their claims. With membership numbers so crucial to a fund’s solvency, many resort to offering new members incentives, such as free gym membership or movie tickets and loyalty points that can be redeemed for goods. In practice, these non-core benefits must be paid for at some point while the result may appear to be more affordable medical schemes in South Africa, the real price is less cover.

In order to succeed in its efforts to attract new members, it should not be necessary to entice them with such incentives, providing the core benefits are seen to be of sufficient value, appropriate to the needs of both the main member and his or her dependents, and within the family budget. KeyHealth has achieved these criteria by combining a network of preferred service providers, with some unique and invaluable core benefits to become one of the most affordable medical schemes in South Africa.

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