Reduce Medical Aid Shortfalls
March 3, 2020
Medical schemes in South Africa are creating tension between themselves and their members. Their members are paying a fortune each month in premiums, but it does not end there. They also have co-payments and medical treatments and bills that they have to pay. It is unthinkable that a set of regulations proposed at one time was the banning of gap cover. And the introduction of rigid rules with the marketing of hospital cash plans. The idea was to protect medical schemes from these products, which could threaten sustainability. Continue reading to find out how you can reduce medical aid shortfalls and benefit your pocket.
Gap Cover is Critically Important to Reduce Medical Aid Shortfalls
People with medical aid get gap cover to reduce medical aid shortfalls between the medical scheme payout and the hospital bill. These sorts of products have become popular as South Africans see medical aid inflation outstripping general consumer inflation. Thousands of families have gap cover policies and hospital cash plans as well.
The demarcation regulations protect medical aid schemes from products marketed as medical aid scheme alternatives. Hospital cash plans, for instance, say they will pay out R5 000 a day in the hospital. This sounds adequate, but the cost of being admitted to a private hospital is literally in the region of R10 000 a day.
People believe that the sustainability of medical aid schemes is under threat. Their reason being that medical aid products attract only young, healthy people. Then they just forget about the old and frail, who desperately might need medical aid.
The SA Insurance Association (SAIA) welcomes the removal of the prohibition on gap cover. Gap cover allows consumers access to insurance policies that provide real value and more importantly essential cover for medical costs way beyond that which is covered by medical schemes.
The truth is, according to the South African Customer Satisfaction Index (SAcsi), when you do research, you’ll find that not one medical aid is meeting the expectations of policy holders. This makes gap cover so important.
What’s Happening to your Money?
How do medical aids meet their budget? It looks like by increasing their prices. The medical scheme needs to estimate the overall annual risk of its member’s health care expenses by looking at their past history as well as the expected increases in the cost of medical treatment in the new year.
That’s when they set up a finance structure to ensure sufficient funds are available to pay for the health care benefits which they plan on selling to their members.
Reducing Shortfalls isn’t going to Happen – So Get Gap Cover
Toward the end of each year, they release their premium increases for the new year. These increases will be in keeping with how the scheme managed their expenses during the past year. It will help members determine how much gap cover they need. Frankly, they could care less whether their members are battling or not, so long as they are making money.
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All info was correct at time of publishing