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Medical Aid – Affordable Medical Aid Plans


Affordable Medical Aid Plans Must Offer More Than Low Premiums

A former president of Harvard University is noted for a statement to the effect that if we consider the price of a good education to be high, we would do well to consider the far greater cost of ignorance. This is a statement that the average South African would do well to keep in mind when they are on the lookout for affordable medical aid plans. What, indeed, may be the true cost of attempting to shave a few more rand off the price of premiums each month?

To better understand the potential danger of this type of economy, one may need to look more closely at the factors that have made this sort of cover necessary. Historically, South Africa once had one of the best state-funded healthcare systems in the world and one that became a model on which many other countries chose to base their own systems.

Since those halcyon days, however, medicine has advanced in leaps and bounds and new technology such as magnetic resonance imaging (MRI) and computerised axial tomography (CAT) alone have seen the cost of diagnosis, treatment and hospitalisation escalate at an unprecedented rate. Despite increases, government funding alone has become inadequate to meet the increased demands on state-sponsored facilities both in terms of cost and patient volumes.

Today, without the payments made from South Africa’s numerous medical aid plans to the private healthcare sector, which, incidentally, is faced with exactly the same rising costs, its services would never be affordable to any but the extremely wealthy. Instead, most of the almost nine million members and dependents currently covered by such schemes would be forced to join the long queues and waiting lists at the nation’s overburdened and underfunded public hospitals and clinics, now often limited to providing primary care.

Currently, each year, South Africa’s approximately ninety active medical aid schemes receive almost R130 billion in joint premium contributions for membership of their various plans. As a not-for-profit company, each aims to retain around 20% of its income after operating costs and settlement of claims in order to cater for contingencies and to maintain solvency. Ensuring sufficient membership is also essential, as is striking a balance between the proportions of young, older and pensionable members. Individual schemes tend to adopt differing polices to achieve these ends whilst attempting to keep premiums affordable.

Whether or not a member will have been right or wrong to settle for a product that appears cheaper than its competitors, however, is not a matter that will be decided purely by its price tag. Instead, this will be determined by its performance during the twelve months that follow and by whether its benefits prove to be both relevant and adequate to meet their healthcare expenses and those of any dependent members.

Though reassuring, a large membership alone may not be the guarantee of an affordable medical aid plan as the associated marketing costs and incentives can often mean curtailing benefits in order to limit premium prices. As well as a large membership gained over more than fifty years of dependable service, KeyHealth focusses on core-benefits when designing our affordable medical aid plans, offering some, such as Easy-ER, that are just as unique as they are indispensable.