Customising the curve

July 26, 2011

An essential component of one’s well-being is a tailor-made scheme that works for the individual

Medical aid schemes in South Africa have come a long way since their inception some 60 years ago. Increasing competition between the country’s larger and more recognised medical aid and health insurance companies has led to benefits being readily accessible. This development, coupled with South African medical aid members’ increasingly specialised healthcare requirements, has seen companies shifting their focus to that of providing maximum medical coverage on hospital plans, as well as a notable increase in industry competitiveness.

The shift to the current variance in scheme availability has been significant within the South African medical sphere.

Most aid schemes have tailored family health insurance packages aimed at preserving the vitality of a family, while individual men’s and women’s insurance requirements are being addressed through a range of flexible medical aid plans.

However, not all is as simple as often portrayed, with recent reports showing that medical inflation has run at excessive highs over the past five years. It is clear that the undertaking of informed financial decisions in relation to medical aid is no longer an option, but rather a necessity.

As pointed out by numerous experts over the years, effectively managed healthcare presents the only viable solution to South Africa’s healthcare problems.

According to recent findings by analysts Jenny Ramsden and Marlene Heymans, medical inflation has averaged more than 30% a year for the past five years; however, salaries (on which medical aid contributions are based) have climbed by only 10%. This has created a margin that is simply not manageable for the average individual, and a financially crippling one for those supporting a family. It has therefore been left up to the individual to ensure he/she stays ahead of the cost curve.

Medical aid rates in South Africa differ significantly from scheme to scheme. Coverage may start from as little as R400 for a single person, providing in-hospital cover with a chronic medicine benefit to R3 000 per adult member on upper level plans.

Pricing for such schemes often seems exorbitant; however, it can far outweigh the financial burden when an individual actually requires medical care.

With that said, each individual has an increasing amount of influence when it comes to controlling the cost curve of his/her chosen scheme.

One of the most effective ways to ensure one stays ahead of impending cost fluctuations is to take the time to custom tailor a scheme to meet personal health and financial needs.

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