HEALTH FEATURE MEDICAL AID SCHEMES IN 2021
31 October 2020
The quest for true value in a post-COVID-19 world Selling healthcare is now more challenging than ever.
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elling medical scheme benefits to younger healthcare consumers, particularly if a loyalty programme promising a number of attractive extras were part of the deal, used to be pretty straightforward. Life has, however, changed in the past number of months and so have the values of most South Africans. In a post-COVID-19 world, the need for quality healthcare cover has shot to prominence and, going forward, decisions made when it comes to buying healthcare cover will be based on an entirely different set of rules. “Financial pressures following a worldwide recession, job losses and reduced working hours have seen many people, particularly younger individuals, tightening their belts while focussing on essentials, including accommodation, food, healthcare and education, while reducing costs such as entertainment and other leisure activities,” notes Josua Joubert, chief executive and principal officer of CompCare Medical Scheme. “Recent research has shown that many younger individuals are moving back into their parental homes to reduce their expenses. Not only is everyone looking for better value at a more acceptable price, but better healthcare outcomes are seen as being all-important. Furthermore, research has shown that millennials, who will make up 75% of the world’s workforce by 2025, care more about health and other benefits than previous generations. They are also technology-driven and, where possible, would prefer online consultations with healthcare professionals – and we already offer this service at CompCare.” Younger people who still mistakenly assume that
it is safe to go without healthcare cover should note that a National Financial Capability study conducted in the United States has revealed that millennials collectively have more medical debt than elderly baby boomers. This indicates that millennials are also vulnerable to health events. “Affordability issues are a growing challenge in the private healthcare sector. In the light of current cost pressures being reported globally, affordability challenges are a fact of life for individuals the world over. People are hard pressed to find lasting value when it comes to the delivery of affordable healthcare, particularly in the current financial climate. “In times of uncertainty, one of the greatest attributes that any medical scheme could offer its members is the ability to innovate to such a degree that value can be created from even the lowest of healthcare budgets. Everyone is looking for a low-cost option that is not only affordable but also sustainable, and we believe we have developed a solution that more than fulfils this need,” asserts Joubert. Healthcare actuary and managing director at 3ONE Consulting Actuaries, Carl Yssel, adds that since its introduction to CompCare’s product suite in 2017, UniSave has fast become one of the most popular products on offer in that price range and market segment. “Appealing to young members, the option includes unlimited hospitalisation, and a medical savings account set at the maximum permissible level of 25%. This out-of-hospital flexibility has seen the option grow significantly since inception, while maintaining a positive financial performance. Given these good results, the scheme continually focuses on enhancing benefits and securing the lowest contribution increases possible.
Budgeting for 2021 will be challenging for medical schemes: HFA
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or medical schemes, budgeting for 2021 will be challenging, says Lerato Mosiah, CEO of the Health Funders Association (HFA). “The uncertainties around the trajectory of the COVID-19 pandemic and the treatment and prevention requirements mean that schemes will need to make provision for managing the disease and any arising clinical complications. “Scheme reserves have also been negatively impacted by the struggling economy and difficult investment markets, and schemes must take this uncertainty into account when pricing contributions into the future.” Mosiah adds that protecting
members, both through providing adequate benefits and through ensuring that contributions remain affordable, is going to require that medical schemes navigate carefully through this complex time. The unprecedented pressure on consumers brought on by the COVID-19 pandemic prompted a quick response from medical schemes who rallied to grant financial and other assistance to their members. “I applaud the medical schemes industry for their speedy response to finding ways to assist their members through this difficult time, while still maintaining compliance with the very tight regulatory framework that
SCHEME RESERVES HAVE ALSO BEEN NEGATIVELY IMPACTED BY THE STRUGGLING ECONOMY AND DIFFICULT INVESTMENT MARKETS 32 WWW.MONEYMARKETING.CO.ZA
“Based on 3ONE’s benefit richness modelling, UniSave provides value in excess of its contribution point. Our research has shown that, while the industry average richness fluctuates between 80% and 100%, UniSave is positioned well above the average, at 103.3%. Combined with a low price point, the option is highly competitive,” notes Yssel. GRAPH 1: BENEFIT VALUE INDEX BY PLAN
CompCare is not only conscious of the importance of keeping healthcare affordable and accessible, says Joubert, but seeks to facilitate the delivery of topquality care. Packaged to adapt to the individual needs of every medical scheme member, CompCare is highly focused on providing service excellence at a price that is right,” he adds.
governs the funding industry. “From as early as March, members with a confirmed diagnosis of COVID-19 were assured that their tests and treatment for the disease would be funded in full.” For medical schemes, this meant allocating unbudgeted funds for extensive testing and treatment, including the often-prolonged funding of high-cost, lifesaving treatment in hospital. Assisting members to stay safe and adhere to infection control measures also meant the rapid implementation of coverage for additional benefits like virtual consultations with health service providers and funding for extra personal protective equipment (PPE) in hospital, as well as isolation facilities. “Together with hospital groups, schemes closely monitored the utilisation of high-care and ICU hospital beds with a view to redirecting their members to facilities with available space when necessary,” Mosiah says. South Africa’s extended lockdown resulted in severe financial hardship and a complete or partial loss of income for many medical scheme members. “Many medical schemes structured innovative ways, within regulatory
Josua Joubert, CEO and Principal Officer, CompCare Medical Scheme
parameters and within scheme rules, of accommodating members who were struggling to pay contributions due to an interruption in their earnings. “While some schemes permitted members to utilise their accumulated savings to pay contributions, others offered payment concessions to SMMEs. Schemes focus on providing a range of plans to meet medical and affordability needs across their membership, and members are always encouraged to consult their financial advisers to find an option best suited to them and to enable them to retain cover,” she adds. HFA is a representative organisation for medical schemes, administrators and managed care organisations. Through its members, HFA represents 53% of all medical scheme principal members in the country. For information, visit https://www.hfassociation.co.za/
Lerato Mosiah, CEO, Health Funders Association
