Personal Finance | Supplement the pay gap when medical aid schemes become unaffordable
Medical schemes remain unaffordable for many working South Africans. According to Gary Allen, chief executive at Sanlam Health, an individual should not be spending more than 10% of their income on health cover. Considering that a basic hospital plan can set you back R1 800, anyone taking home R17 000 or less a month will find that medical schemes are not an option.
While there have been talks about the design of a low-cost medical scheme benefit with a reduced set of PMBs, these have not yet been approved by the council. In its absence, medical insurance has been largely filling the gap for those individuals who earn less than R17 000 a month. Medical insurance falls under the short- and long-term insurance acts. An agreement was reached with the council, which approved the pricing and design benefit. The idea is that, over time, once the low-cost schemes are approved, these medical insurance offerings will be absorbed into the existing medical scheme structure.
The cover starts at R420 to R579 for the main member. The monthly premium for a married couple with two children, including the accident benefit, is R1 468, and a single parent with two children would pay R999. “The affordable health insurance market is where all the growth is happening. It is way outstripping standard medical scheme cover,” says Momentum Health chief marketing officer Damian McHugh, which offers corporate clients an integrated medical insurance offering called Health4Me. “We find that employers use this solution for employees earning less than R30 000 a month.”Primary medical insurance focuses mostly on day-to-day benefits such as GP visits, dentistry and medication.
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