If I cannot afford medical scheme membership, what are my health insurance options for 2023?
Submitted by: Teresa Settas
Times are tougher than ever and many households are looking for ways to ease their financial burdens, and that includes the risks of out of pocket health costs. For those who simply cannot afford medical scheme membership, health insurance solutions are increasingly in demand by consumers who do not want to take the risk of not having any access to quality private healthcare in their time of need.
Health Insurance is a valuable alternative solution. The benefit of health insurance is that it provides a range of options on cover from basic primary care only options for your day-to-day needs, hospital only options as well as more comprehensive options combining both in and out of hospital benefits.
“Health Insurance helps people who may have no option but to opt out of medical scheme memberships due to affordability challenges, to those who simply have no access to traditional healthcare funding options. Demand for basic health insurance plans that cover basic primary medical care such as day-to-day consultations with general practitioners, dentistry, optometry and acute and chronic medication have seen significant growth in the last 12 months. This has accelerated as the state of public healthcare facilities has declined. Interest in more comprehensive plans that provide cover for defined hospital events within stated annual benefit limits is also growing,” explains Chris Pretorius, Chief Underwriting and Claims Officer of GENRIC Insurance Company Limited, underwriters of Wesmart Financial and Administration Solutions. Wesmart provides a wide range of health insurance options for individuals as well as SMME and corporate employer groups.
Why is health insurance cheaper than a medical scheme membership?
One of the reasons why a medical scheme membership is expensive is that medical aids must provide full cover for a list of treatments and conditions called Prescribed Minimum Benefits (PMBs) which is a major cost driver. These PMBs include 270 in-hospital, life-threatening procedures and 26 listed chronic conditions and these must be covered at cost for all members. This means members pay for these benefits, whether they use them or not. In fact, many medical scheme members may in fact never even need to claim for a PMB event in their lifetime. It is this ‘base’ cost for the PMBs that typically puts medical scheme access out of reach for most lower to middle income earners.
Health insurance does not cover Prescribed Minimum Benefits (PMBs), nor is prescribed to by PMB legislation. Rather, health insurance can specify its benefits and pays out a defined or fixed amount towards them – from a doctor’s visit, to medication, to a hospital procedure, emergency, or accident, up to a fixed sum defined in the policy. This means you don’t have the hard upfront cost for a set of PMBs that you may never actually end up using or needing. From an employer’s perspective, health insurance means that you can build your employee health benefits strategy based on the employee’s actual needs, as well as on what the company and employee can afford.
“The reality is that the cost of even an entry level, basic private medical scheme benefit, which on average starts at around R1300/pm for a main member, is typically out of reach for millions of workers, and for SMEs who may want to provide such benefits for their staff but simply cannot afford to. Health Insurance works differently and specifies the benefits and pays a fixed sum towards them. Health insurance also works with a designated list of private healthcare providers that you would need to use which helps to keep the cost of cover more affordable,” explains Chris.
It is important to understand the difference between health insurance and a medical scheme and how they function and what they cover respectively. Here’s a comparison of the two:
| Health Insurance | Medical Scheme |
| Health insurance is cover for possible unforeseen events within a stated benefit structure. | A Medical scheme pays for services as prescribed within the scheme-specific rules and is controlled through stringent risk management protocols. |
| Health insurance specifies its benefits and pays out a defined amount towards them. Health insurance does not cover Prescribed Minimum Benefits (PMBs), nor is prescribed to by PMB legislation. This means you don’t have the hard upfront cost for a set of PMBs that you may never actually end up using or needing. | Medical aids have to provide full cover for a list of treatments and conditions known as Prescribed Minimum Benefits (PMBs). Medical Schemes must cater for PMBs by law and this is a major cost driver. These PMBs include 270 in-hospital, life-threatening procedures and 26 listed chronic conditions and these must be covered at cost for all members. |
| Health insurance covers health events at fixed or specific amounts as contained within the specific policy schedule. Health insurance typically does not cover extensive hospital benefits, and is usually limited to accidents and emergencies and specified hospital events, at specified costs. If costs exceed the limits, the member will need to pay the difference.
Providers manage the costs of cover and keep the premiums affordable by working with a designated network of healthcare providers, providing cover for these defined events and conditions – say for example a GP or dentist consultation – and by ensuring that acute and chronic medication adheres to a set formulary. |
Medical scheme benefits are managed within categories and limits. They also typically have much higher overall annual limits on private hospitalisation. These factors combined mean that the starting cost of the package of minimum benefits often puts it out of reach of millions of South Africans. |
| Health insurance can be used in conjunction with the medical aid scheme to cover any possible shortfalls that may be incurred. For example, a member on a core hospital plan with a medical scheme can take a primary care health insurance benefit to cover their day-to-day, out-of-hospital healthcare needs. | Medical schemes often have shortfalls due to the difference between the medical scheme rate and the rate at which providers charge. Members often take out additional gap insurance to cover these shortfalls. |
| Health insurance pays benefits according to a policy schedule. | Medical schemes are tariff and protocol driven. |
More comprehensive health insurance options also offer the day-to-day benefits and certain hospital events, including private emergency hospital stabilisation benefits. Cover is provided to a set limit for specific events and conditions – and obviously the more comprehensive options with hospital benefits will cost more than a primary care benefit option.
“A significant benefit is that certain health insurance benefit options also provide for preventative care which is a big advantage of being covered. Most people without health insurance postpone going for annual check-ups or health screenings, if at all. Having access to preventative care helps doctors detect an illness early, and early detection can minimise the severity of an illness and possibly even save your life. More comprehensive health insurance options provide extra peace of mind by providing access to 24-hour emergency medical services and ICU benefits.
“Health insurance gives consumers access to quality private healthcare quickly and affordably, ensuring that a health event doesn’t become both a health and financial crisis. Whether you’re an individual looking for a cost-effective solution that understands that you are healthy and don’t need all the “bells and whistles”, a family that needs an affordable solution that meets your growing needs or an employer that needs a viable healthcare solution for employees to take care of day-to-day doctor visits and medication, health insurance provides an invaluable solution where medical scheme benefits are simply not affordable,” concludes Chris.
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For more information visit http://www.wesmart.co.za
WESMART Financial and Administration Solutions (Pty) Ltd is an Authorised Financial Services Provider (FSP 45769), underwritten by GENRIC Insurance Company Limited (FSP: 43638), an Authorised Financial Services Provider and licensed non-life Insurer.
GENRIC Insurance Company Limited (GENRIC) provides a wide range of Health Insurance options and holds an exemption in terms of the Demarcation Regulations from the Council for Medical Schemes (CMS) under exemption number DM1090. This is not a medical scheme, and the cover is not the same as that of a medical scheme. This policy is not a substitute for a medical scheme membership.
