by Dr Rajesh Patel, Head of Health Systems Strengthening
As living costs rise and many South Africans face financial pressures, healthcare coverage may feel like a luxury, especially for young, healthy individuals. Amid ongoing policy debates over National Health Insurance (NHI) and the future of private healthcare, securing financial protection through a medical scheme remains a practical necessity. Medical schemes provide essential cover for medical services and expenses, shielding members and their dependants from the unpredictable costs of medical care.
With recent premium increases, many members feel the strain, leading some to consider downgrading their options or even opting out entirely. However, the reality is that continuous medical scheme coverage is crucial for maintaining both financial security and long-term health. Dr Rajesh Patel, head of health systems strengthening at the Board of Healthcare Funders, emphasizes the importance of staying on a benefit option that meets your health needs. He also advocates for solutions that make healthcare more affordable and accessible for all.
Why are premiums increasing?
According to the Council for Medical Schemes’ (CMS) latest report, in the 2023/2024 period, South African medical schemes collected R232 billion in premiums and paid out over R218 billion in claims for approximately 9 million beneficiaries. Medical schemes contribute substantially to meet the health needs of their beneficiaries. The billions of rands spent in this single period covered a wide range of healthcare needs, from stays in private hospitals to advanced medical procedures to expensive but life-saving medicines.
Here are some of the main drivers behind rising premiums:
| Medical inflation and rising healthcare costs | Increasing prevalence of chronic illnesses | Delayed costs from COVID-19 relief measures | ||||
| Medical costs have consistently risen faster than general inflation, driven by advancements in medical technology, new developments in medical treatment, and more expensive medications entering the market. Schemes need to adjust premiums to keep pace with these rising costs, to ensure they can cover their members’ needs. Health care is becoming increasingly more expensive around the world. It is not just a South African phenomenon. | Chronic diseases, such as diabetes, hypertension, and heart disease, are on the rise in South Africa. Managing these conditions involves continuous, often costly health care, leading to higher-value claims. Medical schemes must allocate resources to support these needs, contributing to higher premiums. | During the pandemic, many schemes held off on premium increases to assist members financially. Some schemes even provided premium holidays to ease members’ financial strain. While beneficial at the time, this left a funding gap that schemes must now address to maintain their financial sustainability and ensure ongoing access to quality health care. | ||||
The value of staying on your medical scheme
| Protection against high medical costs
Medical expenses can be unpredictable with costs for emergency care, surgeries, and specialist treatments often reaching hundreds of thousands of rands. Even a healthy person can have an unfortunate accident, become a victim of a crime or sustain a grave injury at school. Medical schemes are not just for those with serious illnesses or chronic diseases. They protect members from these high costs, allowing access to the healthcare they need when they need it without running the risk of crippling debt or even bankruptcy. |
| Avoiding late-joiner penalties and waiting periods
Members who end their membership and then try to join a medical scheme later can face steep late-joiner penalties that could increase premiums by up to 75%. The Medical Schemes Act of 1998 determines these penalties to level the playing field between long-time contributors to the scheme and late joiners who join a scheme only when they anticipate serious health problems. Continuous membership of a medical scheme avoids these penalties and keeps the member’s premiums more affordable. If a person joins a medical scheme only after they discover a health condition, the scheme is permitted by law to impose certain waiting periods before it begins to pay for treatment to ensure the sustainability of the scheme and to be fair to the rest of the scheme’s members. |
| Access to preventive and wellness care
Many medical schemes offer preventive care options, including wellness check-ups, screenings, and support for mental health issues . Preventive care detects health issues early and lowers the risk of severe complications that are more difficult and expensive to treat. For younger members, these services are essential for staying healthy, for proactive health management and long-term savings. |
| Coverage for chronic and unexpected health conditions
Medical conditions can develop at any age, often unexpectedly. Continuous coverage ensures access to health care for chronic and acute conditions. This is particularly important given the growing incidence of lifestyle-related illnesses like hypertension and diabetes among younger adults. Staying on a medical scheme secures access to treatment and consistent management of these conditions. |
Practical steps for selecting the right benefit option
If you are considering adjustments to your coverage, selecting a plan that balances affordability with essential benefits for your needs is key. Here are some strategies:
- Evaluate your health profile: Assess your current health, family medical history, and lifestyle. If you are generally healthy, consider plans that prioritize preventive care and wellness benefits, such as annual check-ups. For those with chronic conditions, choose a plan offering comprehensive cover for specialist visits, medications, and ongoing treatment.
- Choose essential coverage for financial protection: If the amount of the premiums is a concern, focus on benefit options covering essential hospital and emergency needs. These plans provide high-cost protection without extensive extras, keeping premiums manageable while securing critical coverage. Contacting your medical scheme or consulting a broker can help identify benefit options that align with both your budget and health needs.
- Participate in wellness programs and leverage incentives: Many schemes reward healthy lifestyle choices through wellness programs that offer incentives like premium discounts. Engaging in these programs can reduce costs while encouraging healthier living, offers both financial and personal health benefits.
- Prioritise preventive care: Preventive care, including medical screenings and vaccinations, helps maintain health and avoids costly complications. By choosing a benefit option that includes preventive services, you can manage your health proactively and reduce the risk of more serious health issues in the future.
The long-term value of staying covered
In the current environment, remaining on a medical scheme is about more than just immediate healthcare needs; it is about long-term security for both health and finances. Medical schemes provide peace of mind that, should an emergency arise, members are protected from the high costs of private healthcare. For young adults, medical schemes offer access to preventive care, helping support lifelong health, while older members benefit from the stability and consistency of chronic disease management.
As the healthcare landscape evolves, medical schemes will continue to be a cornerstone of protecting members’ well-being. By selecting a plan that suits your needs and maintaining coverage, you are making an informed choice that supports both immediate and future health security for you and your dependants.
With rising healthcare costs, the BHF advocates for improved affordability and accessibility. To this end, it has engaged the Competition Commission to allow collective bargaining between schemes and providers, and urging the CMS to revise costly Prescribed Minimum Benefits (PMBs) to emphasise preventative and primary care. PMBs are a set of minimum health services that all medical schemes are required to cover by law.
Furthermore, BHF also calls on the Minister of Health to implement regulations under the Medical Schemes Act for a more affordable PMB package. Doing so will allow low-cost, basic benefit options that would expand medical scheme access, promoting healthcare and financial security across the country.
By prioritising accessible, affordable healthcare for all, we can lay the foundation for a healthier, more resilient South Africa where everyone can thrive.
About the Board of Healthcare Funders:
The Board of Healthcare Funders (BHF) is a non-profit company representing the interests of over 40 medical schemes & administrators covering 4.5 million beneficiaries in South Africa and additional 2.5 million beneficiaries in six countries across Africa.
For more information on the BHF and its members, please visit: https://bhfglobal.com