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Options if medical schemes are unaffordable

Dec 13, 2021

Options if medical schemes are unaffordableMedical 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.

For example, a single parent with a child would pay Bonitas R3 360 for a basic hospital plan.

The high entry costs for medical schemes is driven by the prescribed minimum benefits (PMBs) set out by the Council for Medical Schemes (CMS).

This requires that all medical schemes cover and pay in full the costs charged by the medical service providers for 270 life-threatening conditions and 26 chronic illnesses. The cost to cover this list of PMBs is around R820 per member.

While there have been ongoing talks around the design of a low-cost medical scheme benefit with a reduced set of PMBs, these have not yet been approved by the CMS.

Medical insurance

In the mean time, medical insurance has been largely filling the gap for those individuals who earn less than around R17 000 a month.

Having medical insurance is different from belonging to a medical scheme. Medical insurance falls under the short-term and long-term insurance acts.

An agreement was reached with the CMS which signed off on the pricing and design of a low-cost medical scheme benefit, and 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.

Sanlam recently launched its comprehensive health offering for the retail market under Sanlam Health Solutions, which combines the various elements of medical cover allowing individuals to find a product that meets their pocket.

Their Health Solution includes a medical insurance primary care option providing for GP visits, medication, pathology, radiology, basic dentistry, and optometry, with additional cover available for accidents.

The accident benefit provides cover up to R225 000 per event with an overall annual limit of R1 million, and therefore allows for hospitalisation at a private hospital.

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. 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 Damian McHugh, head of marketing at Momentum Health, 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,” says McHugh.

Gap cover

Primary medical insurance focuses mostly on day-to-day benefits such as GP visits, dentistry, and medication. It excludes private hospitalisation, although in some cases extended cover can be purchased.

Gap cover insurance is bought in conjunction with standard medical aid cover, as a top-up for the cost of private hospitalisation and specialists. Many medical scheme members are opting for entry-level hospital plans which they then top-up with gap cover.

This article first appeared in City Press.


  1. Hi Maya

    My son is 25, healthy with no underlying medical conditions, and earns R29000 per month.

    He has not been a member of a medical aid since I was retrenched which was a good number of years back when he was still at school.

    He is now wanting to provide for his medical costs, and we both find the array of options totally confusing and he is unsure whether to go for a hospital plan, “proper” medical aid, insurance, gap cover or a combination of any of these.

    Your advice on what sort of product or combination of products would be greatly appreciated.

    Many thanks and all the best for 2022

    • I cannot provide advice, but a hospital plan is a good start as that is the biggest expense one faces if he becomes ill or is in an accident. Momentum Health has an interesting building block approach that allows you to select specific services to keep prices down. Gap cover is also definitely worth considering


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Maya Fisher-French author of Money Questions Answered

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