By Nassief Mohamed and Caleb Ornellas
The world saw a dramatic change in 2020, when the Covid pandemic forced us to question everything from our careers to our health to how and where we lived. From a commercial perspective, businesses faced challenges too, whether it was dwindling customers due to lockdowns, strain on essential services or landlords struggling to collect rent from struggling businesses.
It wasn’t all bad news though: Covid also forced many industries to think outside the box in order to survive and thrive, which resulted in innovation. Consumers of these businesses also changed their behaviour to align with changing priorities – and many companies changed their offerings as a result. For the medical aid industry specifically, here are five changes that have emerged in the post-Covid years:
Medical aid is seen as essential rather than optional
While medical aid has often been seen by South African consumers as a grudge purchase, post-2020 it’s regarded as a necessity by those who can afford it. While medical aid costs are still a concern, the pandemic has made many realise that the right plan is worth the investment. The mindset has shifted from ‘Is medical aid worth it?’ to ‘Can I afford not to have it?’ Consumers are also now more sharply focused on value, where they want to know their coverage will truly protect them in a crisis.
There’s more choice of cheaper plans
According to Statista, as of 2022, 15.8% of South Africans are covered by medical schemes, and the Council for Medical Schemes reported that the number of medical aid beneficiaries increased roughly in line with South Africa’s annual population growth rate of around 1%. However, while the portion of the population covered by medical aid remains relatively static, South Africa’s economic downturn in the post-Covid years is changing consumer behaviour regarding the specific type of medical aid plans being chosen.
Earlier this year, hospital and medical group Netcare flagged an emerging trend where increasing numbers of existing medical scheme members are downgrading due to cost pressures. This follows another trend noted in 2023, where increasing numbers of new medical scheme members are looking for restricted (and therefore cheaper) plans rather than more comprehensive ones.
More flexibility in their plans
Due to people delaying planned procedures during 2020, the number of claims was higher than normal in 2021, resulting in higher contribution increases across the board in 2022. The added effect of a struggling economy and rising inflation meant that medical aids have been looking at ways to offer financial relief to members in terms of how their plans are structured. Fedhealth, for example, is offering unprecedented flexibility when it comes to medical savings. Members on one of their hospital plans with no savings can switch to a flexible day-to-day savings plan should they need to – and only then will they start paying for them.
Gap cover has become more popular
Gap cover has become more popular as people have opted for cheaper plans that don’t cover all medical expenses. People are seeing gap cover as necessary to cover things like medical tariff surcharges, sub-limits (rand value limitations) imposed by the medical aid, as well as procedural and non-network co-payments.
Mental health is more of a concern.
The mental impact of the pandemic was profound, from people dealing with the effects of isolation, unemployment or losing loved ones. As a result, more emphasis is now being placed on mental health as a critical part of overall well-being – and medical aid schemes in South Africa are recognising this, too. Mental health has started to become a more considered benefit to be provided by several medical schemes. While schemes are required to cover certain mental health benefits as part of their prescribed minimum benefits (PMBs), several medical schemes show innovation in this area, whether enhanced wellness programmes or access to mental health wellness apps to provide extra support and better access to mental health experts.
In the wake of the pandemic, the medical aid industry has undergone significant shifts, but there’s scope for even more to be done. Going forward, medical aid schemes will benefit if they continually prioritise their members’ struggles, priorities, and challenges in the post-Covid years.
* Mohamed is the managing director of financial services firm Fairbairn Cafe, and Caleb Ornellas, is a medical aid broker at Medway Marketing.
PERSONAL FINANCE