Remchannel’s latest Employee Benefits Guide indicates that a growing number of employers are acknowledging the importance of providing medical risk cover and are thus making medical-aid a compulsory benefit – it notes a 5% increase since Remchannel’s pre-Covid-19 survey conducted in 2019.

There are good reasons for this, since medical-scheme membership means legislated access to care for prescribed minimum benefits (PMBs) and cover a wide range of illnesses and conditions, and brings younger members into the risk pool, which helps to reduce the cost of membership for everyone.

The problem is that not everybody in South Africa can afford medical aid scheme membership. Stats SA says only 15% of the population enjoys such membership, which leaves 52 million people dependent on public healthcare. As we are grappling with the impending National Health Insurance system which could take years to implement fully, this places an enormous burden of care on the state.

Remchannel’s study further points out that 44.4% of employers subsidise their employees’ monthly medical aid contributions by 50%, 20.6% provide a subsidy of between 60% and 66% and 29% provide a 100% subsidy. While this helps with costs, some employees may still struggle to afford medical aid membership.

Budget-friendly medical aid options exist and are generally useful for lower-earning and blue-collar workers. Flexible health-insurance products can further bridge the gap by increasing access to quality private healthcare for these workers and ensure broader health coverage for the population – a win for South Africans.

Let’s look at the role health insurance plays in the healthcare landscape

What to look for in a health insurance product

Health insurance provides access to essential, day-to-day care and some hospitalisation in a private sector healthcare setting.

Benefits could include unlimited GP or nurse visits, in-hospital illness and accident benefits and medication for listed conditions, depending on the provider and plan selected. Policyholders choose from a network of suppliers.

There may also be access to basic dentistry, optometry, radiology, pathology and other services, as well as limited specialist treatments and consultations (if referred by a GP).

Private hospital cover is often excluded or limited, though some providers have options that combine day-to-day benefits with cover for defined hospital events within annual benefit limits. For example, a product may offer private emergency transportation, stabilisation, trauma and/or accident benefits, or other features.

Old Mutual offers four health-insurance products targeting groups of 10 and above:

Golden Hour Plus

R260 for the principal insured person per month

Primary Standard

R320 per principal insured person per month

Comprehensive Standard

R400 a month per principal insured person per month

Primary Standard with a hospital plan

R440 a month per principal insured person per month

All these options include GP visits, in-hospital accident and illness benefits, acute medication and access to private emergency services.

Options for employees

While medical-aid membership has long been the default standard of cover in South Africa, employers may want to consider other options.

For example, many medical brokers are in favour of a “mixed healthcare” funding model that sees clients retaining a medical-aid hospital plan and combining it with gap cover and a basic health insurance plan. This may make sense for employees with large families, who can unlock the benefit of unlimited GP visits, for example.

However, it’s important to understand the limitations of health insurance – for example, if an employee needs cancer treatment or dialysis, it's key to consider if they will have access to and be able to afford the necessary treatments.

It’s a good idea to calculate whether lower premiums will offset expenses or co-payments that would have been taken care of on the medical aid scheme. Health insurance typically pays out a defined amount for specific health events or conditions that will be defined upfront in the policy document.

Health insurance may not comprehensively meet the needs of older people, people with dread diseases and those with large families of young children, so it’s best to speak to a medical broker or financial adviser to discuss individual needs and identify gaps.

However, the options need to be carefully weighed, and where health insurance is included as part of an employee benefits package, employees should be informed of all potential consequences.

Key differences between medical aid and health insurance

Medical aid

• Managed by medical schemes, which are non-profit organisations regulated by the Medical Schemes Act, and which ensure the right of access to healthcare
• Legally required to cover Prescribed Minimum Benefits (PMBs) – emergency medical conditions, 271 listed medical conditions and 26 chronic conditions
• Options differ, but for each option, members are charged the same premium for the same benefit

Health insurance

• Managed by insurance companies, with products regulated in terms of either the Short-term or Long-term Insurance acts, depending on license and product structure. The sale of these products is also regulated by the Financial Advisory and Intermediary Services Act (FAIS). Currently exempt from the Medical Schemes Act
• Not required to cover PMBs, and pay out a defined amount for specific health events or conditions, as defined in the policy
• Premiums differ according to age and relevant risk factors