JOHANNESBURG - Medical aid membership in South Africa has declined from 17% to 15% over the past decade, as rising private healthcare costs make cover increasingly unaffordable for some households.
As a result, some South Africans are turning to health insurance to help them access healthcare when they need it.
Kaelo CEO Dr John Jutzen says medical schemes provide significant value to their members, but affordability remains a major challenge.
He says medical scheme contributions are becoming more expensive and are outpacing salary increases.
"And so that's an ongoing problem. So, health insurance is a growing market."
He attributes the growth in health insurance largely to people who previously had no medical cover and are now seeking more affordable options.
“Medical schemes, although expensive, provide incredible value. And that side of the market, which serves a different market segment, has its own pressures. Where we see the growth in health insurance is in fact where people had no cover before and now are seeking cover. So, it's not a trade-off one versus the other. It's just a new market entering the system,” he explained.
Medical aid is designed to provide broad healthcare coverage while ensuring access to a wide range of medical services. Offers are more extensive, often including hospital care, outpatient treatments, chronic medication. Meanwhile medical insurance is a risk-based product that offers a more focused range of benefits compared to medical aid. They are often limited to what they'll cover such as specific major events like hospital stays and surgeries, and depending on your coverage, medical insurance will help out with some of the costs for outpatient visits or day-to-day benefits. |
Jutzen said health insurance could cost about a third of the price of traditional medical aid, making it a more affordable option for people who cannot afford high monthly contributions.
However, lower premiums do not necessarily mean beneficiaries receive the same level or range of cover.
Jutzen said health insurance could still provide meaningful benefits to people seeking affordable healthcare options.
“The benefits are very comprehensive in the medical scheme space and the health insurance space. Although much more affordable, they are still effective.
And so, they serve the needs of a market that’s looking for affordability and value,” he said.