Given the current economic trajectory in SA’s post-COVID-19 economy, many consumers and employers are facing far greater financial constraints than ever before. Already, the trend of people who either radically downgrade their medical scheme benefits or cancel them entirely due to affordability constraints is growing. At the same time, a huge percentage of the working and unemployed population already has no form of private health cover at all. Only 16% of South Africans have access to private healthcare while 84% fall under public healthcare services.
South Africa faces an excessive demand of healthcare from government which has led to the public system being over-utilised and under-resourced. This leads to frustration for employers, employees and patients, especially at the time when productivity and business survival is at the cornerstone for employers. For employees with chronic conditions such as diabetes or hypertension, the battle is far greater and recurring. It is one of the reasons why health insurance is quickly emerging as a viable alternative to medical scheme cover and increasingly becoming part of the corporate employee benefits landscape.
“Our healthcare system is typically more reactive than proactive when it comes to healthcare needs. Proactive healthcare differs from reactive in the sense that preventative action is taken before symptoms manifest at a stage where it requires hospitalisation. For many, medical insurance serves as an important intervention to unplanned healthcare costs through its support for primary healthcare, such as unlimited GP visits. A good primary healthcare plan is a solid investment against unplanned health emergencies,” explains Dion Mhlaba, Board Chairman of Wesmart Financial and Administration Solutions.
“The benefit of health insurance is that it provides a range of options on cover from basic primary care only options, hospital only options as well as more comprehensive options combining both in and out of hospital benefits. For employer groups who want to ensure that employees have access to quality health care and means to protect their productivity and retain skills, health insurance is a viable alternative, especially when it comes to primary healthcare which typically forms the core of a persons’ needs,” adds Mhlaba.
“The cost of even an entry-level, basic private medical scheme benefit is typically out of reach for millions of workers. This is because the core cost of the ‘prescribed minimum benefits’ (PMBs) – a set of defined benefits to ensure that all medical scheme members have access to certain minimum health services regardless of the benefit option they have selected – comes at a hefty starting cost. Many medical scheme members may in fact never even need to claim for a PMB event in their lifetime. It is this ‘base’ cost for the PMBs that typically puts medical scheme access out of reach for most lower to middle-income earners,” he explains.
Health Insurance works differently. Unlike medical schemes, there is no ‘prescribed minimum benefit’ list. Instead, medical insurance specifies the benefits and pays a fixed sum toward them and also works with a designated list of private healthcare providers that you would need to use which helps to keep the cost of cover more affordable. Depending on the option selected, a basic health insurance plan would cover you for basic primary medical care, including day-to-day consultations with general practitioners and acute and chronic medication. On more comprehensive plans, there is also cover for defined hospital events within stated annual benefit limits.
“On a group scheme basis, for employer groups as one example, health insurance provides a much more affordable and quality healthcare solution that employees and employers can more easily afford and access. Securing health insurance for your employees will also most likely be at a better rate than they could secure on an individual basis, and as a group, there’s more leverage and negotiating power to ensure that the money you do spend on insurance is well spent,” adds Mhlaba.
Health Insurance increasingly becoming part of employee benefits offerings
“For many employees, their first exposure to the concept of financial and healthcare planning will happen in the workplace. In this scenario, the employer is the door opener for many employees to healthcare funding options which create financial and health security for employees and their families. In the current struggling economy, many South Africans also face high levels of debt, and it is a moot point whether employers can sustain the pace of increased workplace demands without more support for financially strapped employees. Given this scenario, it’s obvious that being able to offer healthcare benefits like health insurance for lower-income workers – who would typically rely on the public health sector – provides a massive safety net where employees can access quality healthcare – and the peace of mind and productivity gains is also a win-win for all concerned.
“By adding health insurance to the employee benefits basket for employees who would typically not be able to afford private medical scheme membership, employers get to help remove or at least mitigate employees’ anxieties about protecting their families in a health crisis – and at premiums that they could not obtain on their own, unless when accessed as part of an employee group scheme,” concludes Mhlaba.
Wesmart Financial and Administration Solutions (Wesmart) provides a wide range of Health Insurance options and holds an exemption in terms of the Demarcation Regulations from the Council for Medical Schemes (CMS) under exemption number DM1122. Wesmart is underwritten by GENRIC Insurance Company and the focus is on offering options to both private individuals as well as SMME and corporate employer groups.
Wesmart Financial and Administration Solutions (Pty) Ltd is an authorised Financial Services Provider (FSP: 45769) underwritten by GENRIC Insurance Company Limited (FSP: 43638). GENRIC is an authorised Financial Services Provider and registered Short-term insurer.