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Why Medical Aid Membership is Sometimes Subject to Waiting Periods


We are often told that we receive only that which we are prepared to pay for, and that it is therefore the sum charged that actually determines the quality of a product or service. While there is certainly an element of truth in this, almost every rule has its exceptions. One example of such an exception that often affects private healthcare users in South Africa is the difference in prices charged for medical aid. That is not to say, however, that such differences may not be justified on occasions. In practice, when making such comparisons, it is important to be sure that one is actually comparing apples with apples.

Healthcare is actually a little different from any other form of service in that its cost to the consumer will be determined by the cost of operating the service. Medications and consumables are subject to inflation like most goods, while constant advances in medical technology mean that hospitals and clinics are required to remain at the cutting edge by continually upgrading their diagnostic and therapeutic facilities. This, in turn, means that medical aid prices generally need to be increased every year just to keep pace with the rising cost of providing health-related services. Needless to say, state-funded hospitals are also subject to inflation, and it has become all too obvious what can occur when funding fails to keep pace

At the same time, if they are to continue to meet their contractual obligations, these non-profit insurers need to retain an adequate cash reserve, which can only be obtained from monthly premiums. This means they must be able to attract and retain a sufficiently large membership. In order to do so, whilst also keeping their monthly premiums competitive, many funds resort to offering rewards for loyalty by their exiting members and promising incentives to encourage new members to sign up. However, rewards and incentives also cost money, and so, if medical aid prices are to be controlled, those extra costs can only be compensated for by a corresponding amount when the time comes to pay claims. This can take the form of reduced benefits, which might, at a later stage, become apparent in the form of increased co-payments for members’ accounts.

In order to maintain this balance between affordable premiums and the cover extended to members, the schemes offer a range of products that are appropriate to the income and the probable healthcare needs of the member. For example, a scheme may offer a choice of packages to suit a family with small children, a man or woman living alone, or even for an independent student on low income. In practice, it is the quantity of cover rather than its quality that determines medical aid prices.

Since the establishment of the Council for Medical Schemes in 1998, all schemes operating in South Africa are required accept members, regardless of their medical history, and to provide certain prescribed minimum benefits. These include the diagnosis, treatment, and care of any emergency condition, and of 270 listed conditions, including 25 named chronic diseases. The only variable is how much members are required to pay for these benefits.

KeyHealth, however, offers some unique and valuable extras that are not mandatory, without adding to its medical aid prices.