The affordability of medical aid is the number one concern for many brokers in 2019, as premiums continue to increase while coverage decreases. Increasing medical inflation means that even substantial increases in premiums cannot keep pace, and as a result many medical schemes are implementing restrictions on certain benefits, increased co-payments along with other measures to ensure the long term sustainability of the industry.
“This is putting increased pressure on consumers, and makes adequate gap cover more important than ever,” says Tony Singleton, CEO of Turnberry Management Risk Solutions. “Without gap cover, financial portfolios are left vulnerable. Brokers need to actively communicate the changes in medical coverage and protect their clients by ensuring that gap cover will address any medical expense shortfalls.”
The medical aid industry has been . impacted by changes in recent years due to Medical Schemes attempting to manage risk. Premiums have also increased year on year, above the level of inflation, however, below the level of medical inflation. This means that medical aid coverage cannot remain at the same level. Some of the changes that have come into effect in 2019 include increased co-payments and restricted benefits. Plans that previously carried no co-payments may now have these attached for certain procedures, and the amount of the co-payment has increased in certain instances from a maximum of R15 000 to a new maximum of R35 000. In addition, plans that previously enabled clients to make use of the hospital or doctor of their choice, may now be restricted to a certain network of providers.
“Doctors and hospital fees are not regulated, and with reduced benefits, clients are likely to incur significant additional medical expense shortfalls in the event of a claim. In order to reduce these medical costs and plan for the future changes to medical schemes, brokers should ensure gap cover is sold in conjunction with medical aid policies to prevent unforeseeable medical expense shortfalls that can result in financial struggles,” Singleton explains.
Brokers have an essential role to play in helping their clients obtain the most relevant medical coverage to suit both their needs and their pockets. Each medical aid has different benefits, terminologies and acronyms, and navigating this minefield to compare schemes and plans is complex and confusing. Brokers can cut through the clutter and provide valuable advice, ensuring their clients are comparing apples with apples and are able to understand the various offerings and levels of cover. The premium is only part of the picture, and with incorrect cover you could end up paying significantly more out of pocket, costing a lot more in the long run than a slightly more expensive plan.
Stephen Desmet, Executive Consultant at Accolade Financial Planning Services adds, “We are currently experiencing a crisis in terms of reduced benefits and increasing premiums. Even the most comprehensive and expensive medical aid plan no longer provides full coverage, and there are many areas where medical expense shortfalls may occur. As a result, I would not recommend any of my client taking out or having medical aid without the addition of gap cover, as this is the most affordable way to ensure maximum medical coverage,”
All brokers should therefore aim to provide a holistic healthcare solution to their clients, in order to educate them on the benefits available and how to use them. Moreover, brokers need to ensure that their clients are not burdened with massive medical expense shortfalls at the end of the day.
“There is often a misperception around brokers and what we do. Yet the reality is that we are here to help, and our fees are already covered by medical aid premiums. So, there really is no reason not to use a broker’s services. Brokers are experts in navigating the jargon and act as mediators between clients and the medical aids. The goal is to help clients secure their financial portfolio, including their medical cover, and help them make the most of the benefits that are available. However, it is important to note that clients who already work with a broker need to ensure to reach out to their broker at least once a year to make sure they understand how their cover may have changed, re-evaluate and make alterations if necessary,” Desmet concludes.