In a recent Moneyweb article, it was reported that with an annual increase of 15%, a member’s medical aid contributions will double every five years.  Karen Wentzel, head of annuities at Sanlam Employee Benefits stated that “Over the last few years, the average increase in medical aid contributions has exceeded inflation by 3% to 5% per annum”. The consequence of these hefty increases year on year is that the majority will not afford this during retirement, let alone cope with the increases during their working years. Something needs to change now.

Eighteen months ago Personal Finance headline read: Healthcare industry and consumers battle rocketing medical costs.

A study in the same year found that medical inflation (medical care and health expenses inflation) will be about 2% to 3% higher than Consumer Price Index (CPI) inflation over the long term. That was medical care which did not include medical insurance inflationary increases.

These increases do not reflect the reduction in benefits, the co-payments, and the moving of goal posts in the scheme’s health programs that are then meant to incentivise and provide some form of payback to a member. The impact is that members are left with greater expenses and the inflationary increase creeps closer to the 15% mark.

The Council for Medical Schemes (CMS) has recommended a maximum price increase of 5.4% for medical aid members in 2020. While the circular cautions medical aid schemes not to exceed this proposed increase, experience has shown, many South Africans should expect to pay more.

According to CMS data, an ever-growing portion of the increase is attributable to differences observed in medical aid utilisation, which reflects members’ usage patterns of different service providers annually.  This means that individuals should expect an average increase of around 8.8% in their premiums for the year ahead, almost double CPI. Medical aids routinely exceed the guidelines by an annual average of 3.4%.

Medical aid as we know will become unaffordable for many while others who look after their health opt out of comprehensive plans and buy down to hospital plans. There is an obvious risk in that as most members never know when that chronic illness will strike requiring a year waiting period before buying up. Now is the time for companies and individual medical aid members to carefully consider their future cost reduction strategy and plan types for 2020.

Discovery reported that South Africa is very much part of the global challenge of chronic diseases of lifestyle, and Discovery Health Medical Scheme’s claims data reflect the trend of escalating chronic disease. In 2008, just over 300,000 members registered on the Chronic Illness Benefit. Fast forward to 2017, this figure more than doubled to 642,410 members registered for a chronic illness. How is this possible with all the health programmes and incentives run by Discovery Health?

Is there a solution to managing one’s health to such a degree that only a hospital plan is required with no need for any chronic medication? Yes there is a solution and the same could apply to a member who is on one or more chronic meds. We encourage you to know that members and their families can achieve a state of health that does not require full medical aid cover. Does this sound irresponsible. Most certainly not when you learn how to take back your health and improve upon your current state of being. Read a previous article on the highest claimed events.

You can create your own headline that reads: Medical Aid Costs – Members Take Control For The First Time

While the trend would require members to embrace an increase greater than salary and inflationary increases each year, to write your own headline, you need to answer the following or at least have the appetite to experiment:

Is it possible to turn back or take control of the medical aid and insurance spend to 10 years ago? And is it possible to be healthy enough that one can buy down to covering only the major hospitalisation events? 

If you answer yes to either of these questions we could potentially work together and you could save a fortune in the years ahead. The thing is that we are unaware of the studies that depict and demonstrate how various personal health interventions can improve an individual’s health by up to 100%.  For example :

Creighton University School of Medicine in Nebraska revealed that supplementing with vitamin D and calcium can reduce your risk of cancer by an astonishing 77 percent. This includes breast cancer, colon cancer, skin cancer and other forms of cancer. This research provides strong new evidence that vitamin D is the single most effective medicine against cancer, far outpacing the benefits of any cancer drug known to modern science.

Consider the claims paid out by a medical aid for cancer alone. Discovery reported Cancer prevalence is increasing globally and in South Africa.

The Scheme’s claims experience also reflects the global trend in increasing cancer prevalence. “The number of members receiving oncology treatment has increased over the past 10 years due to the higher prevalence of cancer in South Africa and globally,” said Broomberg. Scheme data shows 33,985 members actively claiming for oncology-related treatment at a total cost of R3 billion over 2017.

The top three cancers are breast (14,435 members), followed by prostate (12,122 members) and colorectal cancer (3 970 members). Soft tissue and thyroid cancer have seen the greatest increase in claimants, up 8.2% each from the previous period.

The most expensive cancer to treat is lung cancer at an average monthly cost of R16,417.  The highest oncology claim paid out was for multiple myeloma at R1.5 million. 

The Creighton University study involved 1,179 healthy women from rural Nebraska. One group of women was given calcium (around 1500 mg daily) and vitamin D (1100 IU daily) while another group was given placebo. Over four years, the group receiving the calcium and vitamin D supplements showed a 60 percent decrease in cancers. Considering just the last three years of the study reveals an impressive 77 percent reduction in cancer due to appropriate supplementation. (The full press release of this study is available if required.

Note that these astonishing effects were achieved on what many nutritionists consider to be a low dose of vitamin D. Exposure to sunlight, which creates even more vitamin D in the body, was not tested or considered, and the quality of the calcium supplements was likely not as high as it could have been (it was probably calcium carbonate and not high-grade calcium malate, aspartate or similar forms). What does all this mean? It means that if you take high-quality calcium supplements and get lots of natural sunlight exposure or take premium vitamin D supplements (such as those made from fish oil), you could easily have a greater reduction than the 77 percent reduction recorded in this study.

The World Health Organization says that 70% of all cancers are easily preventable through dietary and lifestyle changes.

 

Do you have the appetite to save and build a roadmap that over the next 12 to 36 months you have reduced your medical aid bill by up to 50% and while doing so improve your health to such a point that being ill will be a genetic fault and not due to lifestyle factors.

With the proper plan selection for 2020, education and training, your medical aid costs could be reduced by a substantial amount of 30% and more. Obviously, various factors will be taken into consideration, mainly, level of cover day-to-day care and chronic medication requirements.

Should you require help and guidance you welcome to contact our team at info@infiniterisk.com.

Peter Šmanjak

Owner and Founder at Infinite Risk

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