Business Day Medical Cover (Oct 21 2021) by SundayTimesZA

BusinessDay www.businessday.co.za Thursday 21 October 2021

INSIGHTS

MEDICAL COVER OPTIONS FOR 2022 Sponsored content

Affordability a key factor in fund selection

• CompCare believes its stable financial foundation must be matched with medical cover its members can count on, writes Lynette Dicey

ffordability is set to remain a key influencer for private health care consumers in the year ahead given the predicted low growth of just 2.2% for 2022, particularly when it comes to monthly contributions payable towards medical scheme membership, maintains Josua Joubert, CEO and principal officer of CompCare Medical Scheme. “However, although affordability remains a primary concern in medical scheme selection, this alone is not a strong enough qualifier,” he says. “Affordability, together with a scheme’s financial stability, forms part of the foundation of worthwhile medical scheme membership, which then needs to be matched with cover members can count on if medical schemes are to play the role for which they are intended.” CompCare recently announced a 5.75% average weighted contribution increase for 2022, just over 1% higher than the 4.6% implemented for 2021 and lower than the preCovid-19 6.5% average weighted increase implemented for 2020.

Josua Joubert … 15 options. On some options, including the affordable NetworX option — ideal for international students and employees under the R10,000 per month salary band — the increase is as low as 3%. Joubert says the scheme has been able to maintain a high solvency ratio of 47.2% which is well above the 25% required by the Council for Medical Schemes and considerably higher than some of the larger unrestricted schemes on the market. “This translates to accumulated funds per member of more than R24,000 which ensures CompCare continues to

be ranked as one of the most financially sound schemes in SA,” he says, adding that the scheme’s claims ratio of 92.6% is proof positive members are receiving significant benefit from the cover provided by their CompCare membership. Throughout 2021 the scheme conducted member surveys and financial advisor feedback sessions. Benefit enhancements for 2022 have been based on this feedback. “CompCare has 15 benefit options, including an efficiency discount option that offers exceptional value when using network hospitals and pharmacies. An inflationary benefit increase has been applied across all these options to ensure each member can benefit from enhancements, no matter which option they have selected, to best suit their health care needs and budget,” he says. Benefit highlights for the year ahead include the fact that all Chronic Disease List (CDL) conditions will now be paid from risk rather than from the Annual Flexi Benefit. This enhancement, explains Joubert, is specifically being made to the Mumed, Selfsure, Symmetry and Dynamix options, including

/123RF — VALERY POTAPOVA their Efficiency Discounted options, given that all other options in the CompCare stable already cover CDL conditions from risk. From 2022 the scheme is removing the in-hospital pathology limit on the UniSave, Mumed and Symmetry options, including their Efficiency Discounted options, which will now afford members an unlimited benefit. “Members are able to get

exceptional value for money on our entry-level savings option, Selfnet, which also offers cover for eight antenatal visits with a GP, specialist or midwife payable from the risk benefit, which means it doesn’t cut into the member’s day-to-day savings,” says Joubert. “In addition, a child emergency benefit is included which allows for a visit to an emergency room for children younger than six years old —

even if all available medical savings have been depleted.” Enhancements on CompCare’s Dynamix option for 2022 include in-room procedures for GPs and specialists to be paid from the above threshold benefit, with the limit having been increased by a full 10%. The Pinnacle option, a particularly good choice for corporate executives, now also includes in-room procedures

for GPs and specialists to be paid from the above threshold benefit, while all procedural copayments have been removed. Joubert believes CompCare’s outstanding child benefit and child rate — which is applied until the age of 27 for students and those who are financially dependent — will set the scheme apart for young families wishing to lay a solid health foundation for their children. The scheme’s preventative men’s and women’s health benefits, as well as a wellness benefit, continue to be among the best on the market and is ideal for those seeking value while maintaining a healthy and active lifestyle, he adds. “We are one of the only schemes in SA providing cover for injuries sustained during professional and adventure sports, as well as providing a

WE ARE ONE OF THE ONLY SCHEMES IN SA PROVIDING COVER FOR INJURIES SUSTAINED DURING PROFESSIONAL AND ADVENTURE SPORTS

search-and-rescue benefit,” he says. Ever mindful of the growing need for mental health support, the scheme’s comprehensive psychosocial and emotional wellness benefit is included across all options with access to a round-the-clock counselling helpline and referrals for face-to-face counselling when required. The scheme has also decided not to impose GP referrals or co-payments on dermatologist consultations charged within the scheme tariff for 2022. “It remains to be seen just how far-reaching the ongoing impacts of the pandemic will be,” says Joubert. “In the meantime, CompCare is forging ahead with benefit options that will address members’ real needs, providing them with access to the care they deserve in the here and now, protecting their health for the future and supporting them in achieving their wellness goals along the way. We have not forgotten every membership number represents a human being who relies on us to put their best health care interests first. We take this responsibility very seriously.”

Giving members more control over expenses Fedhealth has announced an average annualised contribution increase of 5.5% for 2022 which includes a three-month increase holiday. The scheme plans to fund the increase for the first three months of 2022 by utilising R105m of its excess reserves. Despite the increase holiday, benefit enhancements kick in on January 1. “Our reserves grew by R189m in 2020 due to a reduction in admissions primarily driven by nonemergency electives,” explains Fedhealth principal officer Jeremy Yatt. “We elected to manage those reserves responsibly, following a prudent view when setting contribution increases for 2021.” To ensure sustainable contribution increases, an average 7.4% increase is actually required but as a result of the scheme ploughing back its reserves, members will only receive the reduced 5.5% annualised increase, he reveals. “In times like these, where affordability means everything, we take great pride in helping our members to enjoy the best possible cover, without breaking the bank,” says Yatt. Fedhealth’s differentiation has long been focused around customisation, and allowing members to create and control their medical aid through the scheme’s innovative MediVault and flexiFED option range. “For the past three years Fedhealth’s MediVault and Wallet system has been reshaping the way day-to-day benefits work, giving members more control over their monthly medical aid expenses,” explains Yatt. “We’ve since refined it based on feedback received from both members and brokers, and for 2022 we’ve streamlined it even further.” As far as hospital cover is concerned, members are still able to choose their cover based on their life stage by choosing one of four flexiFED options. All options can be used as hospital plans, but with the added safety net of available day-to-day benefits that members only pay for if and when they use them. Yatt explains that flexiFED 1 is designed for the young and healthy, offering hospital cover, screening benefits, GP consultations, dental benefits

Here /iSTOCK

Jeremy Yatt … customisation. and female contraception paid from Risk. To make medical aid more accessible for young people, this plan will only see a CPI increase. flexiFED 2 adds to the benefits provided on flexiFED 1 but in addition caters for young couples planning a baby, with good maternity, infant and childhood benefits. flexiFED 3 is ideal for growing families with an enhanced maternity benefit and customised childhood benefit. In addition, its chronic benefit covers additional conditions over and above the 27 PMB conditions also known as the Chronic Disease List. flexiFED 4 takes care of mature families with a bigger chronic medicine benefit for additional chronic diseases, a mental health benefit and an oncology benefit. “Our unique benefits, paid from Risk, provide members on all the flexiFED options with what is essentially a hospital plan on steroids with some dayto-day expenses already included without even having to touch or pay for day-to-day benefits,” he says. Members can continue to choose their level of hospital cover, saving either 11% or 25% on their monthly contributions with GRID or Elect. From 2022,

IT IS THE ONLY SCHEME THAT ALLOWS MEMBERS TO UPGRADE WITHIN 30 DAYS OF A LIFECHANGING EVENT, SUCH AS PREGNANCY

MediClinic hospitals will be added to the GRID network. Elect variants, on the other hand, allow members to save 25% on their monthly contributions by paying a fixed R13,000 co-payment on elective procedures. “These have really come into their own, appealing primarily to a young, healthy market who don’t foresee any elective surgeries but want the security of emergency cover at any private hospital,” explains Yatt. In terms of day-to-day benefits, Fedhealth has provided two options: first, there’s upfront day-to-day benefits so members know exactly what they will pay each month (fixed). “This is exactly the same as the amount of savings on other schemes,” says Yatt. “However, choosing the second option to control your own dayto-day benefits (flexible) provides members with the full flexibility of the MediVault, giving them control over their monthly medical aid costs given that they only pay back the day-to-day benefits they use over 12 months.” Conceding that some members find it hard to keep track of fluctuating flexible payments, the scheme sends a statement video and MediVault specific statement each month, and reminds them when their Wallet balances run low. Fedhealth is the only scheme that allows members to upgrade within 30 days of a lifechanging event such as pregnancy or serious illness. Another plus in the scheme’s favour is that members with financially dependent children pay child rates up to the age of 27. Other new benefit enhancements include a cancer benefit which allows members their choice of oncologist from the Independent Clinical Oncology Network or the South African Oncology Consortium; cover for the HPV vaccine for girls between the ages of nine and 14; while the mammogram screening frequency has been moved forward to once every two years, rather than once every three years; and a stress and anxiety benefit, which provides for virtual consultations with a psychologist, has been added to flexiFED 1.

We understand that good health is true freedom Live Assured with Medshield Medical Scheme knowing you re

BusinessDay www.businessday.co.za Thursday 21 October 2021

INSIGHTS: MEDICAL COVER OPTIONS FOR 2022

Delivering value and added benefits

Scheme has •introduced a

number of member-centric innovations in the past year

edshield Medical Scheme, which has announced a member weighted average contribution increase of 6.3% for 2022, has refined its product offering for the year ahead to address gaps raised by brokers. Thoneshan Naidoo, Medshield Medical Scheme principal officer, reveals that the scheme has applied a 5.2% enhancement on specified benefits across all options with no benefit cuts, while at the same time allowing for additional GP consultations for chronic members. The scheme has also repackaged some of it benefits to allow for better value and added ease of access to care, including its Medshield Mom and Toddler benefits. In deciding the annual contribution increases, explains Naidoo, the scheme needs to estimate what is going to happen in the next year, especially in light of the ongoing Covid-19 pandemic and the

Thoneshan Naidoo … reserves. demands made on the scheme in the event of a fourth or fifth wave of infections. “Many unknowns remain and we have a duty to ensure we can financially cover our members for the years ahead,” he says. Medical schemes such as Medshield are not-for-profit organisations. The only way they can pay members’ health care claims is through member contributions. “We don’t have a profit motive, nor do we pay dividends to members,” explains Naidoo, adding that any surplus funds generated are always passed on to members as benefits. Given that some medical scheme members are facing significant financial constraints in the wake of the pandemic, the decision facing all schemes is

whether to consider lower contribution increases this year. However, a lower increase now could potentially result in above 15% increases in the future, explains Naidoo. “We decided to rather opt for a manageable increase this year and aim for a sustainable single digit increase next year. Ultimately, our aim is to ensure a consistent and steady increase both for next year and the year after that rather than a significant hike in the future. We are confident the increase we have decided on is sufficient to cater for any uncertainties, including sufficient reserves in the event of a fourth or fifth wave of Covid-19 infections or the need for a third vaccination.” He reveals that the scheme has also had to take into consideration the impact of long Covid. Initial indications are that many people who have had Covid-19 are experiencing a number of long-term symptoms. “There are still so many unknowns around this virus we felt it was important to take a conservative view.” In real terms, he explains, the monthly contribution increases on Medshield’s MediCurve plan — a revolutionary digital plan launched in the past year — resulted in a modest increase of R87 per member per month for 2022. “Technological efficiencies have enabled the scheme to offer this plan at an

Moves to raise the age of child dependants

/123RF — OLEGDUDKO affordable rate of R1,485,” says Naidoo, revealing this is the scheme’s lowest-priced plan. The increase on its MediPlus Prime plan is R228 per member per month. Naidoo stresses, however, that the focus should not only be on the percentage increase but rather on the actual monthly contributions in rand value. To improve the basket of options the scheme plans to introduce a new affordable hospital plan targeted at sports men and women which provides for sports-related injuries and rehabilitation for sports-related injuries, as well as a low-cost benefits option,

WE DON’T HAVE A PROFIT MOTIVE. ANY SURPLUS FUNDS GENERATED ARE ALWAYS PASSED ON TO MEMBERS AS BENEFITS

Is your medical aid giving you less than expected? Move to the medical scheme that fits your journey and visit momentummedicalscheme.co.za

both of which are subject to Council for Medical Schemes approval. It’s a competitive market and to be sustainable schemes need to have a consistent focus on delivering value and improved benefits as well as attracting young and healthy members. The scheme has introduced a number of member-centric innovations in the past year including building on its SmartCare Digital Healthcare Ecosystem to open the door for virtual consultations. The portal, explains Naidoo, is easily accessible via computer, smartphone or tablet. “We’ve also enhanced the self-service functionality on the Medshield App and interactive website to allow for virtual GP consultations,” says Naidoo. Not only will this make it easier for members to manage their day-to-day health care through these channels, but they can also benefit from the scheme’s health and wellness portal, Medshield Movement,

and the scheme’s loyalty programme at the same time. Medshield’s 2022 product design strategy is aimed at addressing issues of affordability as well as access to quality, private health care, says Naidoo. “Ultimately, providing access to affordable, quality health care is at the heart of what the scheme offers.”

An emerging trend among some medical schemes is to increase the age of child dependants beyond the traditional age of 21. The most significant of these is Fedhealth, which from 2022 will be offering child rates to age 27 for financially dependent children. Similarly, Bestmed will now be offering child rates to age 24, up from the previous age 21, and for registered students to age 26. “Medical schemes are always trying to stay competitive and retain market share,” explains financial advisor Dawn Ridler. “Increasing the age of ‘students’ who are still financially dependent on their parents is one way they can do this.” The difference in the

premium between an adult dependant and child dependant can mount up to thousands of rands in a year of savings, she points out. However, she says main members are unlikely to change medical aids to gain a few extra years of cheaper cover for a student because of the onerous restrictions which typically include a three-month general exclusion and a 12-month condition specific exclusion which could put the rest of the family’s medical care at risk. “Younger individuals often do not need the comprehensive cover required by their parents — unless they have chronic conditions — so a cheaper plan without the frills is often enough,” she says.

CONFIDENTLY COVERED

Despite an expectation many medical scheme members would reconsider their medical cover given that SA has experienced one of the worst economic downturns in the country’s recent history, this fear has not been realised. “In a health care pandemic you need medical aid cover more than ever — and you need to be confidently covered,” says Naidoo. Since the onset of the pandemic Medshield has paid more than R500m in claims and vaccinated about 40,000 of its members.

/123RF — DOLGACHOV

CHEAP-

’s

Fedhealth members will enjoy a contribution increase holiday until 1 April 2022. In 2022, Fedhealth will put R105 million of Scheme reserves towards contributions so that members can pay 2021 rates for the rst three months, but already enjoy 2022 bene ts from 1 January.

Switch to Fedhealth to save on medical aid without compromising on quality of cover.

BusinessDay www.businessday.co.za Thursday 21 October 2021

INSIGHTS: MEDICAL COVER OPTIONS FOR 2022

Deferred increase: relief for members

Digital health care is one of the areas where Momentum has focused on innovating. The extent of the scheme’s capacity to afford members world class health care from the safety and convenience of their homes now includes an expansion of its Hello Doctor offering with 24/7 access to consultations with qualified doctors, who can now also prescribe medication; the ability to do a virtual health assessment at home; the option to complete an online fitness assessment; and extensive wellness support through the scheme’s comprehensive Coach in your Pocket app.

Scheme strives to meet the holistic health care and •financial needs of companies and individuals

here is no question the pandemic has had a debilitating financial impact on many medical scheme members. Cognisant of this, Momentum Medical Scheme has deferred its contribution increase to later in the year. The weighted average, 6% increase that will be introduced in September 2022 equates to a net increase of 2% over the year, one of the lowest increases announced for the year ahead. What made the scheme able to defer the contribution increase to later in the year was its robust performance throughout the pandemic and stable financials, reveals Damian McHugh, executive at Momentum Health Solutions, the scheme’s administrator. “Although medical inflation continues to rise, and new medical procedures are adding health care costs that we have not previously had to make

Damian McHugh … innovation. provision for, we believe we are in a position to delay the increase in contribution required to ensure the scheme’s long-term sustainability until September next year. “As consumers bounce back from reduced income — or even loss of income in many cases — this relief could benefit many of our members.” In Momentum Medical Scheme’s favour is the fact its

members are, on average, well below the industry average age. This means, explains McHugh, the scheme’s long-term claims forecast is more favourable than most other schemes. “When you factor in a pandemic like Covid-19, the impact of a favourable member profile becomes even more important. The reality is there is a higher cost associated to treating an older Covid-19 patient, especially if they end up in hospital and on a ventilator, compared to a younger patient being treated at home.” While the scheme has made provision for unexpected future pandemic-related costs, McHugh acknowledges there remain many unknowns around Covid, as well as pentup demand as members delayed checks such as mammograms, it has been able to focus more on helping members retain their medical scheme cover while battling through these tough economic

Customer satisfaction at six-year low: index The latest South African Customer Satisfaction Index (SA-csi) for Medical Schemes reveals the gap between what customers want from their medical schemes and what they perceive to receive in return for their premium has been steadily widening since 2019. According to the SA-csi, a study which is conducted by Consulta on the overall satisfaction of members of the country’s largest open medical scheme providers, overall customer satisfaction of members of SA’s largest medical schemes has sharply declined in 2021 with some recording their lowest customer loyalty scores over a six-year period. The study includes Bestmed, Bonitas, Discovery, Medihelp, Momentum and the only closed medical scheme included in the survey, GEMS. The 2021 index found that Bestmed emerges as the leader on overall customer satisfaction, with all other schemes performing on or below industry par. Ineke Prinsloo, head of Customer Insights at Consulta, says these findings are significant, particularly as medical schemes enter the renewal season when they announce their benefit changes and premium increases for 2022. “With customer satisfaction levels and loyalty scores at one of their lowest points in years, and with consumer price tolerance at equally low levels, there’s likely to be significant shifts of members to lower-cost benefit plans and between medical schemes as customers try to balance value, quality, necessity and affordability.” She says what is notable is that the customer expectation is not adjusted commensurate to the buying down in benefits. In other words, while members look for cheaper options, they don’t “buy down” on their expectations and this is where the incongruence with medical schemes increases. “The impact of the pandemic on household income looms larger than ever, and as reluctant as members are to cut their medical scheme contributions, many have no other recourse. The decline in customer expectations of their medical schemes in the latest index is a worrying trend. Lower expectations should not

Ineke Prinsloo … significant shift. be misinterpreted as a positive outcome as a decline in this metric is typically the driver of drops in all other metrics of customer satisfaction including overall quality — as perceived by the customer — meeting their needs and reliability.” This drop in expectations, she says, could be a precursor to more significant numbers of people opting out entirely or downgrading their benefits to basic core plans as they don’t perceive their current use as meeting their requirements or being reliable in their time of need. “There is a definite disjoin between quality and value versus price paid,” she says. The downgrading or opting out trend is already putting the funding model of medical schemes under pressure given

THIS DROP IN EXPECTATIONS COULD BE A PRECURSOR TO MORE PEOPLE OPTING OUT ENTIRELY OR DOWNGRADING that schemes operate on the principle of social solidarity where all members contribute equally to a pool of funds, expecting that they will all derive equal utility value from the scheme. “The latest index shows healthy and younger members with lower or even minimal benefit utilisation are least satisfied and loyal,” says Prinsloo. “Without focused intervention from medical schemes to address the drivers of customer satisfaction in this key demographic, medical schemes will soon find the pool of funds to subsidise older, less healthy, higher utilisation

members is shrinking, bringing the sustainability of the entire private health care funding model into question.” Between 2000 and 2012, private health care costs doubled in real terms and, on the current trajectory, will have doubled again by 2028. Medical schemes carry the bulk of these costs and are required by law to cover prescribed minimum benefits (PMBs). “SA faces a dire shortage of health care professionals which means most providers charge at rates way above inflation and way above what is sustainable for medical schemes or consumers,” explains Prinsloo. “To manage these hyperinflationary costs, schemes have established provider networks and capped the benefits members can claim for on lower cost options.” But schemes and their members are between a rock and a hard place. “Members can’t rely on an overburdened and underresourced public health care sector, so having some form of medical scheme benefit is a necessity. Medical schemes have little choice but to keep increasing the cost of membership to keep pace with hyperinflation and high utilisation of benefits and reduce benefits by offering less comprehensive, core options at more affordable premiums.” She says while medical scheme contributions increase every year to keep pace, the reality is that the benefits for members are decreasing. This means members are paying more for medical scheme membership but are also paying more for co-payments, out-ofpocket health care costs and penalty fees, especially if they don’t use a network or contracted health care provider. “Medical schemes need to focus on customer experience and loyalty for all members, but especially healthier members who claim less,” she says, adding that the complexity of medical scheme benefits adds to the challenge of how schemes demonstrate value to customers who don’t grasp the regulatory environment. “It is essential schemes address the discontent among a significant portion of their member base who are essential for the scheme’s financial sustainability and viability.”

INSURANCE PRODUCTS

/123RF — GIGGSY25 conditions, says McHugh. Momentum Medical Scheme is an open medical scheme that has more than doubled its membership over the past decade. It is currently ranked as the third largest open medical scheme in SA and, for the past few years, has consistently implemented the lowest increases in the industry. While the scheme lost some members during the pandemic — primarily foreign students and corporate members as a result of job losses and retrenchments — these losses have largely been mitigated by the addition of new corporate clients. Members have access to a

range of options including complementary products offered by Momentum such as HealthSaver+ and HealthReturns+, the latter which is a one-of-a-kind programme to reward members with up to R36,000 per family per year for being active. A vaccine reward benefit in the form of monthly wins has been introduced via the HealthReturns+ programme. Members who have been fully vaccinated and achieved certain milestones during the month receive an additional R100 to spend at participating partners or swipe into their HealthSaver+ account to further boost their

HealthReturns+ earned. “Momentum’s view is not to force anyone to get vaccinated but rather to educate and encourage members to do the right thing,” says McHugh. “We’re strongly in favour of vaccinating as many individuals as possible — everyone’s

REWARDS FOR HEALTH ACTIVITIES ARE BASED ON THE PREMISE THAT MORE ACTIVE PEOPLE TEND TO HAVE LOWER HEALTH CARE COSTS

choices and actions have consequences and the more people who choose to protect themselves and those around them the better for our country’s long-term economic and health care outlook.” Rewards for health activities are based on the premise that more active people tend to have lower health care costs. The scheme, he adds, is committed to mutual respect and open, honest engagement in its approach to beating the pandemic. Momentum Medical Scheme members also have access to complementary products available from Momentum.

Momentum also offers health care insurance products which essentially offer private health care solutions based on insurance methodology, and these products have seen phenomenal growth in the past year, says McHugh. One of its most popular products is Health4Me, a lowcost, affordable solution with good day-to-day cover and benefits, but no hospital cover. Health care insurance products are exempted from offering prescribed minimum benefits as they don’t fall under the ambit of the Council for Medical Schemes. That will change in due course once the Council for Medical Schemes creates a legal framework for insurance products. “We’re focused on innovation and problem solving. Ultimately, we’re striving to meet the holistic health care and financial needs of companies and individuals across the spectrum through a safe, affordable and seamless lifejourney for our clients,” he says.

BusinessDay www.businessday.co.za Thursday 21 October 2021

INSIGHTS: MEDICAL COVER OPTIONS FOR 2022

Covid-19: Global pandemic highlights counting the importance of medical aid cover cost of claims

• Bonitas to expand benefits and tap into reserves to ensure most members have below CPI contribution increases

he 2022 product line-up from Bonitas Medical Fund includes the use of reserves to keep contribution increases lower, a Benefit Booster to stretch dayto-day benefits, a revised international travel benefit with payment for Covid-19 tests and a contribution towards quarantine costs. There is also a renewed focus on preventative care, virtual consultations and plans that enable more South Africans to have access to affordable, quality health care. In a volatile market, Bonitas performed well in the past year, according to principal officer Lee Callakoppen. He attributes this to proactive risk management and prudent board decisions. “A positive offshoot of the pandemic was an increased appreciation of the importance of medical aid cover which resulted in better-thanexpected member retention and a 2.3% membership growth since January,” he reveals. The scheme has taken a strategic decision to utilise about R600m of its reserves to ensure 82% of members receive a below CPI contribution increase for the 2022 benefit year. “The innovative Benefit Booster equates to an increase in day-to-day benefits for members ranging from 16% to 32%, depending on the members’ plan. We believe it is

Lee Callakoppen … strategy. the largest increase in benefits ever seen in the medical aid industry,” he says. The average weighted contribution increase across all plans is 4.8% with the BonStart premium decreasing by 7.9%, which can be attributed to the low cost versus benefits ratio and the younger membership profile on the plan. The decrease in contribution is an industry first — as was the decision to offer BonFit Select at a 0% increase in 2020. Callakoppen says there will be 15 plans for the year ahead consisting of traditional, savings, hospital, edge (virtual), network and income-based plans, each carefully crafted with a specific mix of benefits to appeal to various target markets. Increases range from -7.9% to 6.5%. Bonitas has opted to increase its options which are currently in a growth phase — BonSave, BonFit and

BonEssential — by only 3.6%. The Council for Medical Schemes recommended increases in line with CPI of 4.2% with the caveat that financial stability and sustainability of schemes must remain a priority. “We feel the use of part of our reserves to cushion members against increasing costs is an appropriate strategy,” says Callakoppen. Other top line changes being introduced in 2022 include an additional virtual plan, BonStart Plus, which is aimed at attracting a new profile of member through a diversified distribution channel and attractive pricing. “Virtual care,” says Callakoppen, “has proven a sound and reliable solution for improving access to quality health care and is now offered across all 15 Bonitas plans.” Another change is the introduction of a new Oncology Management Programme that utilises a partnership between Medscheme Managed Healthcare and the South African Oncology Consortium to improve the co-ordination of

OUR MEMBERS REMAIN AT THE HEART OF OUR INTERACTIONS AND WE ACTIVELY STRIVE TO FIND WAYS TO AMPLIFY VALUE

/123RF — SUDOK1 care of oncology patients. The scheme’s back and neck programme — which has a 93% success rate — will be offered on a digital platform from 2022. The eDBC app is a technologydriven channel offering digital coaching solutions and home-based care to help improve pain and mobility. It includes a self-assessment, baseline progress checks and outcomes evaluation. Enhancements on the existing international travel benefit will include a Covid-19 PCR test pre- and post-travel as well as a contribution of up to R1,000 for enforced quarantine. Bonitas will also be introducing a new personalised wellness and lifestyle programme called AMP on the

new Bonitas app. It allows members to access their health information. Callakoppen explains that biometric data, claims and wearable data will be used to regularly update their health score while an avatar will nudge them on the best steps to take to boost their health. In addition, through a partnership with Nedbank’s AVO app, members can access discounts and deals from more than 7,000 merchants. Bonitas is currently waiting for approval from the Competition Commission to its proposed amalgamation with the Nedgroup Medical Aid Scheme. The amalgamation — should it go ahead — will be good news for Bonitas, growing the size of the scheme while at

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Bestmed Medical Scheme ranks first in 2021 SA-csi survey Bestmed Medical Scheme's results for 2021 placed the Scheme at the forefront of customer experience in the South African medical scheme industry. The South African Customer Satisfaction Index (SA-csi) survey is a national benchmark of customer satisfaction.

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the same time decreasing its average age and pensioner ratio and bolstering its reserves. “The future for the scheme remains focused on providing quality health care for members with affordable contributions while still maintaining the financial sustainability of the scheme,” says Callakoppen. “Our members remain at the heart of our interactions and we actively strive to find ways to amplify value and drive business development. “Our focus on care, capability and reliability encompasses not only providing our members with the tools and preventative measures to guard against chronic conditions but help us redefine health care for a new world,” he says.

The pandemic had an impact on claiming patterns. Significantly, most schemes reported elective procedures were postponed. CompCare Medical Scheme principal officer Josua Jourbert says the scheme has had about 3,500 positive Covid-19 cases among its membership base, and tragically lost 130 members to the virus. It has paid out just under R74m for Covid-related cases since the start of the pandemic in SA. “We’re actively encouraging our members to get themselves fully vaccinated as soon as possible,” he says. “Currently 37.7% of our older members have received their jab but given we have a young member base, just 11.7% of all members have been vaccinated.” Fedhealth reports it has paid R307m towards Covid-19 claims. This accounts for 10% of total annual claims and includes Covid-19 tests, admissions and vaccinations. By midSeptember the scheme had paid R60m towards close to 80,000 tests, Covid-19 admissions had cost it R230m, which includes R178m for ICU or high care admissions and R122m for cases that required a ventilator. A Covid-19 admission is on average twice the cost of a nonCovid-19 hospital admission, reveals Fedhealth principal officer Jeremy Yatt. “To date the

SCHEMES HAVE NO CHOICE BUT TO BE PRUDENT IF THEY HOPE TO REMAIN SUSTAINABLE

scheme has seen 26 admissions that were in excess of R1m each, the most expensive of which totalled R4m.” By August 23, 70,220 Covid19 vaccinations had been administered to Fedhealth members which amounts to an estimated R30m. “We estimate 29% of all Fedhealth members are fully vaccinated, with 50% having received at least one dose of the vaccination,” says Yatt. Medshield Medical Scheme principal officer Thoneshan Naidoo reports that six of the 10 highest claims made by members in 2020 were Covid19-related claims. The largest claim, R7.6m, was by a member who experienced Covid-19-related complications. An annual Covid-19 vaccination booster shot, should that be recommended, will cost Medshield an additional R100m per annum. “There are so many unknown risk variables that schemes have no choice but to be prudent if they hope to remain sustainable. We are expecting to see significantly more mental health claims. The stress and social isolation resulting from the pandemic has had an immensely negative effect on mental health worldwide leading to millions of people suffering in silence. “Hopefully, through education, awareness and continued engagement, mental health issues will be destigmatised, making it easier for those in need to come forward, without fear, to get the assistance and support needed,” says Naidoo.

BusinessDay www.businessday.co.za Thursday 21 October 2021

INSIGHTS: MEDICAL COVER OPTIONS FOR 2022

Enhancement of offerings spurs growth

Weigh up the pros and cons of upgrading, downgrading It’s once again that time of year when medical aid increases for the year ahead are announced. This year, however, is a different medical landscape compared to just two years ago. Last year was an aberration as medical aid increases were frozen and postponed but just how are medical aids reacting to this “reset”? The past year has been a tough one financially for many as a result of job losses which means they will be forced to adjust their medical expenses accordingly. Others have been directly impacted by Covid-19 — and the possible medical impact of long Covid. As financial advisor Dawn Ridler, the founder of Kerenga Wealth Ecology, points out, while medical aids have seen a substantial increase in costs in some areas, this has been offset by the postponement of elective surgeries, although these can’t be postponed forever. “Medical aid contributions form a significant portion of most people’s monthly budget so it’s worth taking time every year to check you’re on the right plan, or even the right medial aid,” says Ridler, adding it also helps to understand the terms and conditions medical aids operate under before making a knee-jerk reaction that could be costly to undo. “Bear in mind you can’t be refused membership of a

Bestmed ranks •consistently high

for its quality and service in industry indices

/123RF — ALEXSKOPJE

Dawn Ridler … find the right fit. medical aid — unless you have defrauded them — but if you join later in life over the age of 35, you can and usually are penalised with an increased premium,” she explains. The second thing to remember is medical aids can impose a general three-month exclusion, during which you will pay premiums, but cannot make claims, although there are exceptions, she says. Third, medical schemes can impose a 12-month “condition specific” exclusion where you cannot claim. “For example if you are on dialysis you may get a 12-month exclusion,” she says. “This is a good example of why you don’t change medical aid schemes on a whim. All of these ‘penalties’ can apply if you change medical schemes, so it’s a good idea to get advice from your financial planner before doing so.” You can’t be a member of

two medical schemes at any one time so you also can’t cover yourself that way, she says. Medical aid increases for 2022 are not yet back to normal. While some schemes have yet to announce their contribution increases, Discovery and Momentum have both announced a delay in increases until next year. Discovery announced a 7.9% increase next May which translates into a 2.9% percent this year and 5.3% increase in 2022. Medshield, which announced a 5.2% increase, Bonitas, which announced a 4.8% increase, and Bestmed, which announced a 3.9% increase, will see their annual

IT HELPS TO UNDERSTAND THE TERMS AND CONDITIONS MEDICAL AIDS OPERATE UNDER BEFORE MAKING A KNEE-JERK REACTION

contribution kick off as normal in January. By around mid-November every year members need to decide which plan within their medical aid scheme they want to be on, explains Ridler. “Much of that decision is going to be financial, but still weigh up the pros and cons of upgrading or downgrading your scheme given that in most instances you can only change this once a year if your general medical condition changes.” It can make sense to use a plan within the scheme’s network if you can save enough on your premium to pay for the gap cover, she reveals, adding that your closest or preferred hospital may be on their network already. However, if you really want a better understanding of how medical aids work, you need to get your head around prescribed minimum benefits (PMBs), she suggests. For example, the Covid-19 test only becomes a PMB if it is positive. “That list and explanation

should be on your medical aid portal, or look up prescribed minimum benefits on the Council for Medical Schemes’ website for good information.” Another consideration in the annual medical plan choice is gap cover. “Ask your financial planner to find the right fit of plan for your medical aid. Asking how many gap cover plans they offer is not out of place given it’s important to find the right fit rather than the only one your broker is accredited to.” It might make sense to have the same gap cover as your medical aid, Ridler says, because the cover becomes seamless, and you don’t have to make upfront payments and claim back later. “It’s not fun having to whip out your credit card to pay for a CT scan when you’re writhing in agony and on your way to theatre,” she explains, adding that gap covers have the same waiting periods and condition specific periods medical aids do, so, pick once if you can.

hile a number of medical schemes have suffered the loss of principal members in the past year, one of the few to grow this number was Bestmed Medical Scheme, which recently celebrated its 100,000th principal member registration. Including dependants, the scheme now provides health care cover for more than 209,000 lives. Bestmed CEO and principal officer Leo Dlamini ascribes this growth to the continuous enhancement of its product offering, its focus on member experience, leveraging its sales channels and a relentless focus on retention. “We aim to manage — as best as we can — the long-term affordability of contributions so members can continue to access private health care of the highest standard,” he says. Bestmed is the largest selfadministered scheme in SA, offering 13 plans, each designed to suit the needs of members at

Leo Dlamini … sustainable. different phases of their life. The scheme has made a strategic decision to use some of its reserves to ensure all members receive a below CPI contribution increase of 3.9% for 2022 without any benefit reductions for existing members and a general 4.2% increase in their benefit limits. Bestmed ranks consistently high in industry indices. It was the highest rated medical scheme in the South African Customer Satisfaction Index (SA-csi) in both 2020 and 2021. In 2021 it was the highest rated regarding perceived quality, value, overall customer service and customer loyalty. “It’s also significant that our beneficiary complaints are the lowest in the industry,” says Dlamini. The 2020 Ask Afrika Orange Index — which tracks and

benchmarks customer experience — rated Bestmed first in the medical aid category. Its benefit enhancements for 2022 include that members only pay for contributions for up to three children while any additional children are covered at no additional charge. Child dependants are now classified as such until the age of 24 years — up from 21 — and registered students up to 26 years. In addition the scheme has introduced enhanced wellness, preventative care and optometry benefits, and increased its over-the-counter medicine benefit. It has also removed some co-payments and reduced others. An additional maternity benefit is a lactation consultation with a registered nurse or lactation specialist across all plan options. The scheme has also enhanced its day-to-day benefits for consultations, chronic medicine and dental. “We’re committed to ensuring we are large enough to create value for our members, personal enough to provide care for each of them, and attentive enough to listen and respond with agility to realign our service offering to help our members when they need it,” says Dlamini. “Members can rest assured their funds — and the scheme — are secure and sustainable.”

A growing need for gap cover Gap cover is becoming an increasingly popular way for members of medical schemes to protect themselves from unexpected medical expense shortfalls for in-hospital treatment, says Tony Singleton, CEO of Turnberry, a registered financial services provider that specialises in accident, health and travel insurance and funeral cover. “Medial aids are under constant pressure to balance benefits with affordable contributions with the result that they put risk management strategies in place to manage costs,” he explains. “An example of this are a number of procedures which were previously done in a hospital and which are now being performed in day clinics. If you select to have these procedures done in a hospital, you are liable for a penalty.” Given that illnesses and accidents don’t discriminate

Tony Singleton … easy to claim. based on age, he says gap cover is a tool that should be added to every medical scheme members’ financial planning portfolio. “A heart attack, accident or cancer diagnosis, for example, are not planned events and they can happen to anyone, at any time. An event of this nature can leave a family significantly out of pocket if they don’t have gap cover in place.

“In the current tough environment, an unexpected medical expense shortfall can cripple a family financially.” In terms of choosing which gap cover option is the right plan for you, Singleton says the medical aid option you have selected plays a vital role in which gap cover product would be best suited to your needs. “Medical aid and gap cover should be aligned,” he says, adding that to ensure your gap cover option meets your needs it’s a good idea to speak to your financial advisor who can evaluate both your medical aid and financial needs and recommend the best product. What you should be looking out for in your gap cover, he reveals, is strong service delivery from your gap cover provider. “While product benefits and pricing is one issue, it’s important your gap cover provider makes it easy to claim and that they assist you

with queries, particularly around claims, as this can be a stressful time.” Gap cover policies have a continuation capability without additional underwriting for your existing benefits, so it’s a portable type of cover, he says. As such, it’s more important that your selected gap option aligns with your medical aid option, than where the gap cover comes from. Medical inflation is increasing above normal CPI inflation rate which means the impact of a medical expense shortfall is going to be felt on an increasing basis on our overall financial planning in future. “This could potentially lead to medical aid members dipping into their key savings to fund medical expenses unless they have gap cover to make up for the shortfall between what the health care provider charges and what the medical scheme funds,” says Singleton.

NHI is ‘still years from implementation’ Government appears determined to forge ahead with the proposed National Health Insurance (NHI) fund despite the fact analysts insist it is currently unaffordable given the lack of economic growth. Essentially, what government is aiming for is one single, state-controlled medical aid fund servicing all South Africans. That SA’s publicly funded public health care sector is in an appalling state is well known. Overburdened, underresourced and poorly managed, it services more than 80% of the population. The country’s private health care sector, on the other hand, offers high quality medical care but only to those who can afford it or are members of medical schemes. Government’s proposed NHI is an ongoing threat to medical risk planning, says financial advisor Dawn Ridler. “If the past 18 months has taught the department of health anything, it is this is a pie-in-the-sky dream and unworkable for a country with a small, fragile tax base.”

Ridler believes if NHI is implemented as it is currently envisioned, it will be the end of all private medical care with private hospitals and all medical aids ceasing to exist unless they have a licence to practice in the public health care sector. “In my opinion, if it is implemented it will result in a huge brain drain of medical personnel and taxpayers. Highly educated medical personnel will not accept becoming government employees, on government salaries, when they will be welcomed with open arms anywhere in the world.” Medshield Medical Scheme’s Thoneshan Naidoo is an outspoken advocate for a more equitable health care system — something he says is possible through NHI. However, he insists that unlocking an enabling NHI is only part of the solution and that it must coexist with private health care and medical schemes. “South Africans are blessed with the benefit of a world-class private medical sector which is on a par with first world

countries. Our private health care sector is a national treasure and, as such, should be protected and nurtured.” No other universal health care system, including the UK’s NHS, has prohibited or destroyed its country’s private health care system, Ridler points out. “The UK’s NHS is far from perfect, and queues for even urgent surgeries can be months, but you do have the choice of getting private health care at your own cost.” The UK spends about 7% of its GDP on the NHS. This year government spending in SA on health is about R250bn, making government expenditure on health about 6% of GDP, says Ridler, adding that lower income countries, of which SA is one, tend to spend on average 1.6% of GDP on health. “It might be an idealistic dream but perhaps with a private-public collaboration, government health care can be properly administered, cleaned up and the standard of care lifted,” says Ridler. Naidoo adds that careless

comments made by individuals who don’t understand the reserves of medical schemes legally belong to members has heightened concerns around the implementation of NHI. Medical aid schemes, Ridler reveals, have been engaging with government behind the scenes on the issue of NHI. “The general feeling is this is still years from implementation. In 2019, when the NHI took another step forward in the parliamentary system, no budget was published for what is, essentially, a pipe dream.” SA’s tax base is small and somewhat fragile — about 800,000 people or 1.6% of the total population earn more than R500,000 per annum and contribute about 70% of the individual tax. “Taxpayers have come to accept they have to pay for private education, private security, make their own pension provisions and pay for private health care. Removing the choice of private health care would be a game changer that government cannot ignore,” says Ridler.

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