Medical aid contributions could fall by as much as 30% if everyone earning above the tax threshold were required to belong to a medical scheme.
That’s according to the Health Funders Association (HFA), which commissioned research on the topic.
Speaking to 702’s John Perlman, HFA CEO Thoneshan Naidoo said the current voluntary system meant many younger and healthier people only signed up to a medical aid when they needed expensive treatment.
“We actually have a fantastic healthcare system, but medical schemes currently are voluntary. So typically what happens is people opt in and opt out.”
If compulsory medical aid sign-up were introduced, it would align South Africa with the rest of the world, claimed Naidoo.
“If you look internationally around the world where there is, you know, this type of medical aid scheme, you have mandatory membership of employed people.”
Around nine million employed South Africans could potentially be brought into the medical scheme system, he said.
“If they actually joined, it could reduce your contributions by roughly up to 30%.”
ALSO READ: Funding model of medical schemes under strain as more younger SAns choose not to join
How would more members make medical aid cheaper?
Naidoo explained that medical schemes work by pooling contributions from many members so that the cost of expensive treatment is divided across the group.
He argued that when healthier people stayed outside the system, the remaining pool became more expensive because it contained a higher proportion of people needing treatment.
The current problem, said Naidoo, is convincing younger people to sign up to a medical scheme.
For many, it is considered a non-essential and even a grudge purchase.
“Youngsters, you know, don’t earn a lot of money. They’d rather use it for more disposable income. And it’s showing them, cancer does not discriminate. It doesn’t matter what age you are. It doesn’t matter how old you are.”
He also pointed to the massive costs that individual patients could face without cover, citing one medical scheme member whose claims reached R20 million in a single year.
“This is the value of collective contributions of medical schemes. It’s to protect members from catastrophic financial hardship.”
ALSO READ: Mandatory medical scheme membership could cut contributions by 30% – Report
Never miss a major story. Get breaking news and the latest developments from South Africa and beyond as they happen.