Mbali Khumalo, Managing Director at Simeka Health, a partner of Sanlam Health Solutions
Medical aid membership pools are shrinking, according to Sanlam’s 2023 Benchmark Research. Part of the problem is that people get overwhelmed by the confusing web of options available. The temptation is to gravitate to low-cost cover without weighing up what real value means. Mbali Khumalo, Managing Director at Simeka Health partner of Sanlam Health Solutions, unpacks some of the healthcare products available.
Khumalo says, “Just 15% of the population is covered by medical schemes, according to the Council for Medical Schemes’ 2022 report. Simeka Health Group’s data on the employer groups they service further reveals that close to half of employees do not participate in a medical scheme at all. These figures are concerning as many wellness challenges can be avoided through positive lifestyle behaviours and participation in medical schemes and primary care. Joining these earlier on reduces late joiner penalties, enables increased preventative care, and reduces the risk of hospitalisation.
She adds that it’s imperative that people understand policies and schemes before signing up for them. “There’s a lot of industry jargon which can make plans feel quite opaque. It often feels difficult to assess what suits your budget and lifestyle the best. It can be very helpful to chat to a financial adviser to really get to grips with what’s going to work for you, long-term. The cheapest option could be costly at claim stage, for example, or premiums may increase considerably later on.”
Here, Khumalo gives simple explanations of some of the healthcare products available:
1. Medical Aid: Simply put, you pay a monthly premium into a ‘collective pot’ that is mutually owned by the members. A board of trustees, elected by the members, oversee the functioning such as the appointment of the administrator, annual benefit changes etc. You choose the level of cover you require and contribute accordingly. Claims are paid out of the “collective pot” according to the benefit options and limits.
Policies start with a basic hospital plan that covers all costs connected to a hospitalisation incident, according to the rules of the scheme.
Note that all medical aids are required to cover prescribed minimum benefits (PMBs) – a set of minimum health services to cover any emergencies or conditions that impact one’s quality of life – irrespective of the plan a person has chosen. It’s always worth asking if a procedure classifies as a PMB.
It’s also important to ask some critical questions if you know you have a family history of a certain disease. For example, if cancer runs in the family, make sure you compare different scheme’s cancer benefits and history of paying out for cancer-related claims.
2. Gap cover: Medical aid benefits may be capped at specific rates. When doctors and specialists charge above this, gap cover can be used to make up the shortfall, so you don’t end up paying this out of pocket. Importantly, you can usually only access gap cover after you’ve been admitted to hospital, unless otherwise specified. You can only take out gap cover if you have a medical aid.
3. Primary healthcare insurance: This is cover underwritten by insurance companies– for members’ day-to-day, otherwise known as primary healthcare needs. Including doctor and nurse consultations, acute medications, and basic radiology, optometry and dentistry. Some also offer pre-birth maternity care and wellness screenings. These plans rarely cover hospitalisations and are not subject to covering PMBs.
4. Severe illness, sickness and disability risk products: These are all specific insurance products you pay premiums towards that provide a lump sum, tax-free pay-out in the event of specified incident. They complement your medical aid, providing extra financial assistance should a health curveball occur.
5. Employee Assistance Programmes (EAPs): EAPs are work-based, confidential intervention programmes to assist employees with any personal psycho-social issues they’re experiencing, like counselling for depression or anxiety. Employee wellness programmes are similar, with benefits designed to help improve employees’ wellbeing, like on-site yoga, health screenings, and financial education.
6. Onsite Primary Care Clinics: Employers can provide onsite clinics to ensure that all employees have easy access to reliable primary care benefits. Instead of staff having to leave site or take a day’s leave to get healthcare advice and consultations, they can visit the nurse on site. Alternatively, employers can arrange for weekly visits from a corporate nurses, as well as virtual medical consultations. Increasingly, employers are working with external providers like Sanlam Corporate Wellness, to provide cost-effective, tailor-made integrated solutions for their teams.
Khumalo says that the cheapest option may not be the best one, “It’s important to read the fine print to know what is excluded. Cheaper cover may end up being costly at claim stage, with exclusions and shortfalls that you must pay out of pocket. Additionally, consider which major life events are in your short-term future, for example, if you are thinking of having a baby, then this could impact your cover considerations. Remember, gap cover usually has a waiting period of a year, for example, so you won’t be covered for pregnancy for 12 months from taking the policy. It’s highly advisable to speak to a financial adviser who can help you select the right cover based on your needs and budget. It’s also very worthwhile investigating how to take maximum advantage of any wellness and medical aid benefits offered by your employer.
“There is lots of evidence that opting into a plan at a younger age helps foster positive lifestyle habits, prevents hospitalisation, and provides more affordable premiums, with less chance of loadings and exclusions. Having medical cover and insurance in place for those unplanned for health emergencies, is one of the best ways to safeguard your family and everything you have worked for.”
ENDS
