The Nature of Medical Aid Cover and its Importance
With the exception of a job that provides sufficient income to pay for it, some form of medical aid cover must now rank as the most essential acquisition for most South African’s. In the past, the state-funded clinics and hospitals were able to provide services and facilities that were adequate to meet the needs of most of the population. Over the years, however, dwindling funds, increased demand and the rising cost of everything relating to healthcare, from disposables and medicines to surgical instruments and diagnostic equipment, have taken their toll. The result has been long queues for basic healthcare services, while the waiting lists for diagnostic tests, and all but the most urgent surgical procedures have grown to an unprecedented length.
While, by contrast, the services available from the private healthcare sector have improved steadily, the majority of those now enjoying these facilities would be unable to do so without access to reliable medical aid cover. Currently, there are around 90 registered funds in South Africa that provide varying degrees of financial support to members in exchange for a monthly premium.
Options range from only covering those costs that arise during periods of hospitalisation, to more comprehensive products designed to assist with most health-related expenses throughout the year. Similar support, in the form of hospital cash plans, is also available from many of the country’s short- and long-term insurance companies. However, the modest cash pay-outs from this type of product are insufficient to meet more than a small fraction of the actual costs involved and are best seen as a useful supplement that could help with other incidental expenses.
Although also operating on the principle of shared risk, unlike the nation’s insurance companies, those dedicated to providing medical aid cover are required to operate on a non-profit basis. At the same time, they are not at liberty to exclude applicants on the grounds that they may represent a high risk. Given these constraints, their continued success depends heavily upon good governance. This means keeping a tight rein on operational costs, maintaining a sufficiently large but balanced membership, ensuring adequate cash reserves to meet all claims, and having the sound international credit rating needed to access contingency funding if the need is absolutely vital.
From a member’s viewpoint, ensuring that he or she and any dependents have sufficient medical aid to at least cover their most likely needs is important, but so too is the cost of the monthly premiums. Obtaining the best value for money is therefore important. Many employers make a contribution to their employees’ premiums, while tax concessions are applicable both to premiums and payments not covered under the terms of a scheme. Others, such as the self-employed, receive less help.
As with most products, the key to the value of any form of healthcare insurance is to be found in its benefits – in this case, which contingencies are covered and to what extent. Hospital plans are the least expensive option, but their value is restricted to young, single individuals in good health. For a family, comprehensive cover can often be prohibitively expensive. Rather than compromising, however, we offer a range of innovative products that deliver more core-benefits than most competing medical aid covers at premiums within everyone’s reach.