As South Africa braces itself to reach the peak in the fight against the Coronavirus pandemic, Government statistics have shown that the country could reach 400,000 infections by mid-July.
While lockdown conditions may have been eased to level 3 for now, South Africa, and much of the world, is nowhere near the end of the pandemic, and the economic and health repercussions of Covid-19 are going to persist for months to come. For the majority of South Africans, their ability to withstand the financial, emotional and health implications of Covid-19 is being seriously tested.
Household discretionary spending under the knife
As financial conditions for many families deteriorate amidst troubling pandemic conditions, their ability to keep up with private medical costs, retirement savings and general costs of living is also dwindling.
“The trend of individuals buying down on medical scheme cover and suspending contributions towards retirement funding is continuing. The financial pressures are still mounting and the initial three-month payment holidays provided for from April to June on bonds, medical schemes, insurance and so on are coming to end.
“However, many individuals are still having to contend with cuts to their incomes or salaries and in fact, the financial woes are now deepening along with greater uncertainty,” explains Gavin Griffin, Aon South Africa’s Executive Head on Employee Benefits.
While we have not seen any further pronouncements from the Council for Medical Schemes (CMS), it is likely that it will receive further requests for payment concessions on medical scheme benefits to be extended to assist employer groups or individuals.
While the Council for Medical Schemes rejected a collective request from several schemes to allow members a payment holiday, it has considered such exemption applications from individual medical schemes, where each application is assessed on its merits. Much of this concession will hinge on whether medical aid schemes are able to maintain enough cash reserves to pay claims, which are expected to soar over the coming months.
In some instances, where a member had accumulated sufficient savings in their Personal Medical Savings Account, that member has been able to apply those savings to offset their member contributions for the past few months. However, there is no clarity on what relief will be available going forward should members continue to find themselves in financial distress.
Furthermore, the consequential effect of using medical savings to offset monthly contributions is not without risk, as you deplete your excess funds that you may need to fund future day to day claims. If you are facing continued financial duress, it is vital to speak to your health broker to assist and guide you going forward,” says Griffin.
The real healthcare cost of Covid-19
“We have not seen the true cumulative effect and health cost of Covid-19 yet, and as we head into the peak of it with the potential for second waves, it paints an incredibly worrying picture,” says Jacqui Nel, Business Unit Head of Healthcare at Aon South Africa.
“What we do know is that medical schemes are well capacitated, prepared and able to manage the expected run on claims due to the Covid-19 pandemic, so from that perspective scheme members have peace of mind. However, we still cannot afford to get lax around lockdown regulations and measures to prevent infection.
“We must continue to take individual responsibility and take all possible precautions to avoid infection and the potential for health complications. The real healthcare cost of the pandemic will only emerge in the first quarter of 2021, and we expect that this will set the tone for hefty medical scheme increases for the next financial year if we lose control of infection rates in the coming weeks by becoming complacent,” says Nel.
The hospitalisation treatment cost for Covid-19 for an uncomplicated case is pegged between R75k – R85k. This cost rises dramatically if the patient needs a ventilator and intensive or critical care, rocketing to close to R350k, and exceptions may even exceed R500k.
“While consumers increasingly move to more affordable ‘core hospital plans’, it is also crucial to add gap insurance to cover any potential in-hospital tariff shortfalls. It is understandable that many people are having to cut back and reduce their costs – but in doing so it is crucial to speak to your healthcare broker to guide and advise you through this process to ensure that you can withstand the financial ramifications of a health crisis,” adds Nel.
South Africans are struggling with mental health during pandemic
Aon has seen a significant uptake in employee assistance programmes as mental health issues take their toll on employees and families. Anxiety and depression are taking their toll as salaries are being cut, retrenchments are rising and domestic abuse spikes. The domino effects of this pandemic are reverberating through every home and social structure and there is an overwhelming feeling of uncertainty and stress among South Africans.
“From the shop floor right up to executive level, very few people are left untouched. Many have had to adapt to very different work environments in the past three months, and it’s likely that these changed work circumstances could persist into the future. Working from home and flexible work hours may be bliss for some, for others it brings tremendous stress, isolation and uncertainty.
“For many, it is not ‘working from home’, but rather ‘living at work’, and they find themselves unable to cope with the dual home and work stresses, other aspects such as home schooling, and finding a healthy balance in it all. In households vulnerable to domestic abuse, these additional stresses have worsened circumstances for many families, women and children in particular.
Another worrying trend is that people are putting off important health checks and reneging on their chronic medication regimens, which only serves to worsen pre-existing conditions. “While it makes sense to put off any elective procedures and avoid unnecessary exposure in medical facilities, it is never advisable to miss out on important health checks and chronic medication for the likes of diabetes, TB, HIV, hypertension and so on.
“Chronic conditions need to be managed diligently, and any lapse in treatment protocols can have long term and serious consequences. We have heard of cases of people having heart attacks at home because they ignored the warning symptoms out of fear of having to go to a health facility during the Covid outbreak,” explains Nel.
“Telemedicine is increasingly being deployed by doctors to address health concerns online and provide consultations in a reasonably risk-free, virtual environment. Make use of the technology available to engage with health practitioners if you have health concerns during this time – your doctor is best equipped to make a call and advise whether you can be safely treated from a distance, or whether medical intervention is needed.
“Pharmacies also offer delivery services so there is every reason to get chronic prescriptions filled and delivered in order to manage pre-existing health conditions diligently during this time.”
In closing, now is the time for the utmost vigilance and care, not only in managing and avoiding any potential exposure to Covid-19 infection, but in managing any pre-existing health conditions. It is essential to take care of your physical, emotional, mental and financial wellbeing during this time. Make use of the support structures around you, including any employer-provided benefits and wellness programmes, and talk to your professional broker to help you navigate through the financial morass that Covid-19 has imposed on so many lives and households.
This too will pass, but in the meantime, stay safe, stay well and reach out for the help, support and advice to get you through these uncertain and trying times.