Given the current state of the economy and despite the contrary beliefs of many, the companies responsible for assisting you with the cost of your private healthcare are constantly in search of ways in which to provide their members with low-cost medical aid. However, given that the cost of medication and treatment continues to rise, year after year, it is a task that has become increasingly difficult.
One of the first attempts to keep premium prices to a minimum involved the creation of a new type of product. Known as a hospital plan, rather than providing a member with comprehensive cover throughout the entire year, its benefits are strictly confined to those periods during which the member is receiving treatment as an in-patient. While this does result in a substantial reduction in the premium price, all healthcare expenses incurred when not hospitalised are for the account of the member. In practice, unless you are young, single, and in good general health, purchasing this type of low-cost medical aid could prove to be a false economy.
An even worse option would be to opt for the version of this product offered by insurance companies. Rather than providing policyholders with the sums necessary to cover the cost of their treatment, their so-called hospital cash plans simply pay a pre-agreed fixed sum for each day spent as an in-patient. The payments fall far short of the actual cost of healthcare, and are best seen as providing a little help with incidental expenses, such as hiring a TV.
Nevertheless, low-cost medical aid products are available from most of the schemes in South Africa, although they tend to differ in terms of the manner in which the lower premiums have been achieved. The simplest and most direct method is to reduce the value of the benefits provided. For example, where a claim for the cost of an appendicectomy may have previously been met in full, a lower premium can be made possible just by limiting that figure to 90% of the cost. A few similar cuts in other areas and, that price can be reduced even further.
Another way to maintain low-cost medical aid is to increase the membership. The more members that are contributing, the easier it becomes to avoid premium hikes. To achieve this, a number of schemes adopt a policy of offering incentives. In practice, however, these incentives generally serve to alleviate a member’s expenditure in other areas while having very little impact on the premium prices in many cases.
A concept that has proved to be particularly effective in providing low-cost medical aid is networking. This entails the managers of a scheme appointing specific service providers, such as a clinic or pharmacy chain, with whom their members are obliged to deal in order to enjoy maximum benefits.
This is the policy adopted by KeyHealth, and it is one that has not only enabled them to keep prices down, but also to add some valuable core benefits at no charge.