The Pros and Cons of Medical Aid Schemes in SA
Irrespective of which of the almost ninety medical aid schemes operating in South Africa that one may choose to cite, there is no doubt that many of the country’s citizens will be utterly dependent upon it to meet the rising cost of receiving private healthcare. According to a statistical survey conducted in 2014, more than 8,7 million of South Africa’s citizens now rely upon these organisations for this vital form of financial assistance and, between them, contribute close to R130 billion in monthly premium contributions each year.
That the once-thriving state-funded health service is no longer in a position to cope with the increased demand for treatment and the burgeoning cost of the facilities and equipment required to do so, is becoming increasingly obvious. State hospitals, plagued by underfunding and staff losses, have lengthy waiting lists and leave many patients with no other option than to turn to the private sector for their healthcare. No less subject to escalating costs than the state’s services, less than 5% of private patients could afford their treatments without a great deal of help from one of the medical aid schemes in SA.
The existence of these organisations which, incidentally, are required to operate as Section 21, not-for-profit companies, is clearly a pro. Nevertheless, for the bulk of South Africans, the monthly cost of membership continues to remain an undeniable con. To overcome this barrier, those responsible for managing these funds have had to be far more innovative, attempting to create products that provide cover for the more essential contingencies yet keeping them as affordable as possible. That some have been more successful in this quest than others is clear, and this has made it important for a prospective member to review the benefits offered and all of the terms and conditions that govern them, very carefully.
Medical aid schemes in SA are of two types. Those of the “closed” variety will only accept members from a particular company, profession or professional body, while the remainder are happy to enrol anyone who cares to apply. Members of the closed schemes often benefit from discounted, group premiums and an employer will normally contribute a portion of these. The fact that these are also subject to tax relief add further to the list of pros.
For a scheme to remain viable, its cash reserves must always exceed its liabilities. This is only possible through a combination of good governance, an adequate international credit rating and a large enough membership that is predominately healthy. Failure to meet these criteria, resulting in bankruptcy or forced mergers, has seen the number of medical aid schemes in SA dwindle by more than half since the ‘60s. This emphasises the value of a company’s longevity as a yardstick when deciding which may be the best to entrust with our private healthcare expenses.
Though a large membership pool is a definite pro, when it is the result of incentives such as discounted entertainment, these must be paid for with curtailed core benefits. Also, unintelligible small-print often conceals the means to avoid paying claims.
To counter such cons, KeyHealth offers a choice of five affordable products that deliver exactly what they promise, including some valuable, genuinely-free and unique core benefits.