South Africa’s post Covid-19 economy is looking dire and many South Africans face the prospect of unplanned financial hardship for at least the medium-term.

Reprioritising household budgets will be key in navigating through the months ahead, while ensuring that essentials such as healthcare risks are not compromised but taken care of.

“The most crucial aspect right now is to secure your healthcare covers, such as medical scheme and gap cover benefits which will be fundamental to carrying you through a potential health crisis,” explains Martin Rimmer, CEO of Sirago Underwriting Managers.

“The coronavirus pandemic will be with us for many months, if not years to come, notwithstanding many other health conditions and complications that you could face – many of these exacerbated and compounded by the stress of financial difficulty. Your health insurance is what will stand up for you in the time of a health crisis, ensuring that you get the best possible private medical care in your time of need.

“At the same time, if you are facing financial challenges, you may have little choice but to consider downgrading on some of your chosen options. More than ever before, when it comes to your healthcare, this can be a daunting and complex process as there are many interconnected variables to consider.

“The most critical step you can take right now is to engage with a professional and accredited healthcare broker who can guide you through the process, and ensure that any changes you make won’t leave you compromised now, or in the foreseeable future.

“A professional broker brings a wealth of experience, knowledge and advice to the table, and will be able to assess your specific circumstances and needs and match these to a measured and more affordable solution that takes care of you and your family in a crisis,” explains Rimmer.


Top tips if you’re considering a medical scheme benefit change

Before making any changes to your medical scheme benefits, it is crucial to thoroughly investigate and compare your options and ensure that you are not financially compromised by any benefit option change.

According to Jacqui Nel, business unit head of healthcare at Aon South Africa: “Medical benefit options tend to be complex because there are so many options and they all vary widely in terms offering, making like-for-like comparisons tricky at best.

“Factors such as a personal needs analysis, review of your claims history and affordability all come into play. While claims history is an indicator, no one is aware of some of the health risks that may occur in the future, so it is important to understand your approach to and ability to take on any risk.

“Based on this information, your healthcare broker can advise on the best plan to ensure that your healthcare needs are comprehensively covered and that any change won’t leave you compromised or facing hefty out of pocket expenses that you cannot afford,” says Jacqui.

The following should be taken into consideration when considering changing your medical scheme benefit option:

  • Your current day-to-day expenditure and whether your existing benefits provided sufficient cover or if you were out of pocket.
  • If you or any dependants are registered for a chronic condition, whether it qualifies under the 27 regulated chronic conditions or as an additional disease listing for cover. Consider the savings versus the cost of the additional chronic medicine.
  • When you pay less, understand that you normally receive less cover and benefits.
  • Get Gap Cover.  Today, most medical schemes have deductibles and co-payments and many members are left out pocket when hospitalised due to shortfalls on what specialist doctors charge which is usually significantly higher than the rate that medical schemes reimburse.  A broker will be adept at taking your through the various gap options that are suited to your needs, and that would best interface with your chosen medical scheme benefit option.
  • Benefit options that pay for Prescribed Minimum Benefits (PMB’s) only can have an impact on your pocket as you will need to self-fund any non-PMBs, as well as your access to and expectation of care.  Treatments determined as PMB brings a set of its own complex rules and again, this is where an accredited and experienced healthcare broker can help you navigate this potential nightmare. Should you consider self-funding your day-to-day care, ensure that you apply the discipline to make provision for when you may need medical cover.
  • Be comfortable with your savings versus the risk you may be exposed to.
  • A downgrade does not mean that the quality of care is compromised, it merely refers to options that are readily available but are more affordable in terms of contribution, but also through design, potentially less benefit categories available.  So, the understanding of what is relevant to your personal healthcare needs, is determined through a specific healthcare needs analysis that your accredited broker should undertake to ensure that you have adequate cover.

While there are many reasons why someone may want to change their medical scheme options, the most pressing one right now is likely to be affordability and cost.

“Where costs and benefits on a healthcare scheme is a concern, members will often move to another option within the same medical scheme. By doing so, you avoid any waiting periods and it provides the member with an opportunity to either buy-up within the scheme to acquire better benefits or to buy-down with the purpose of securing lower contributions. While most schemes only allow buy-up at the beginning of a benefit period, most will allow a buy-down at any time during the year,” explains Nel.

Given the current pandemic, we believe that medical schemes will be far more accommodating of any of these requests at this time. It is important to discuss with your medical scheme broker the options the medical scheme you belong to may have in terms of a contribution holiday, if any, under Covid-19.

“If you are buying down, I strongly recommend that your current benefit needs are comprehensively reviewed in order to ensure that buying down will not leave you out of pocket when claiming or without benefits that cannot be self-funded, which is likely to be the case if you are already facing financial constraints,” adds Nel.

“While consumers increasingly move to more affordable ‘core hospital plans’, adding gap insurance to cover any potential in-hospital tariff shortfalls is essential to protect you from big financial expenses related to shortfalls on in-hospital treatment, from the anaesthetist to the specialist surgeon.”

Martin Rimmer of Sirago adds: “In one month, Sirago processed multiple gap cover claims larger than R40 000 each to the value of R1 300 000 in tariff shortfalls not covered by medical schemes that clients would have had to pay from their own pockets, had they not had gap insurance in place.

There are very few people who can manage this kind of financial impact without taking additional Gap Cover.

When you consider the potential financial quantum of a shortfall on your medical scheme benefits, and that a gap cover premium is around R370 per month (2020 Sirago Gap Plus) and each family member is covered for up to a maximum of R164 000 per annum, it is clearly evident that Gap Cover policies are a critical part of your healthcare strategy to insure against medical scheme shortfalls at a cost effective monthly premium.”


A fine balancing act

A major health event is usually an unpredictable event and can strike a family at any time which is why the need for healthcare insurance cover, even in tough financial conditions it cannot be emphasised enough.

The emphasis must be on balancing your cover and finding economies where they are to be found. Taking care of healthcare becomes even more important when finances – and your health – are under pressure.

Never assume that the only time you need to see your broker is when you have money.  It’s exactly when you are facing financial duress and weighing up what is essential versus non-essential that your professional broker’s knowledge and impartial advice will shine a light on the way forward, and help you find the wood for the trees.

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