The costs of medical treatments and of hospitalisation have sky-rocketed over the past decades. Especially for people who suffer with chronic illnesses, this makes it increasingly important to have medical aid. However, the high cost of medical aid in South Africa puts it out of reach of a large proportion of the population.
Even if you can afford medical aid, the costs are typically high in relation to what you get. This is partly because traditional medical aid covers you for a very wide range of medical conditions. Most of these you’ll never develop, but cover for a specific condition you do have may be insufficient.
Value-based medical insurance provides cover for a chronic illness you already have. So instead of covering you for a myriad of possible medical conditions and problems it’s likely you’ll never develop, it provides cover for what you really require.
Pros and cons of value-based medical insurance
Along with value-based medical insurance, providers may offer incentives for managing chronic illnesses, with an emphasis on preventing degeneration that could lead to more severe problems (and higher medical bills). Several traditional medical aid schemes already have lifestyle programmes designed to reward members for taking care of their health. However, a value-added plan would be able to focus on a member’s specific chronic illness – diabetes for example – and steps for managing it appropriately.
The downside of value-based medical insurance is that it won’t provide as much cover as traditional medical aid for other medical issues that arise. If you were to break a leg, for example, or develop a medical problem unrelated to your existing chronic condition, you’d have to fork out more money than you would on a traditional medical aid scheme.
Another issue is that it may not always be easy to distinguish between medical costs associated with a chronic illness and those unrelated to the illness. For instance, what if someone trips and breaks a leg as a result of low blood sugar caused by diabetes? Clearly, there may be some grey areas.
The value-based insurance model is likely to be welcomed by medical aid companies. By giving members incentives to keep their chronic illnesses in check, medical aid companies will save money in the long run.
For the public, it remains to be seen how well value-based medical insurance will work. Generally, it’s likely to be a good option if you already spend a lot on chronic illness and can’t afford a more comprehensive medical aid package.