Discovery's wake-up call for South Africans without medical aid
Discovery warns that South Africans without medical aid will face significant penalties for joining later in life. This is the message from CEO and founder, Adrian Gore, at Discovery's interim results announcement back in March.
Many South Africans without medical aid say they can simply no longer afford it, due to the rising cost of living. Nevertheless, the company insists those who think they can just join later in life when they are no longer healthy need to be aware of the penalties for such actions.
However, it's no wonder there are more South Africans without medical aid than ever before. Even the CEO himself bemoaned the trajectory of medical aid inflation, which saw increases earlier this year of between 8 to 11%. And it is having an impact on the average age of clients. As a result, the average age of Discovery members has risen from 32 back 2008, to 38 in 2024. Adrian Gore, CEO of Discovery. Image: Discovery
However, according to Statista, as of 2023, a mere 15% of individuals in South Africa can afford and have medical aid. This number has been on the steady decline ever since. Meanwhile, the vast majority of elderly residents rely on SASSA grants to survive financially and see medical aid as an expensive luxury they can do without.
Nevertheless, Gore says more young people are not taking or dropping medical aid while they're still healthy. They are choosing to only get medical aid when they are no longer healthy. As a result, the company says it is burdened with an older clientele. And a disproportionate number of chronic illness claims is what is driving up medical aid prices for everyone.
Furthermore, as a potential cure-all for South Africans without medical aid, Gore questioned the 'egalitarian' rules of medical aids. Instead, he wants stricter rules for anyone who stays out of the 'system,' that sees them hit with bigger penalties later in life. As a result, medical aid coverage will become more expensive as you get older. And anything like a major injury/surgery in the interim can become financially crippling. Late joiner fees and waiting periods are the means medical aid firms have to try and control misuse. Image: File
Industry experts stress that South Africans should join a medical scheme as soon as they start working and/or before the age of 35. They say starting early should be seen as an investment into the future of your health, even if you're still young and healthy. It is just as important as retirement savings.
Late joiner fees and waiting periods are designed to prevent misuse of the medical scheme system. And stop those who may try to exit and enter the healthcare system as and when they need to. These late joiner penalties are based on the individual's age when joining the scheme and the number of years they have not been a member.
The penalty is generally a percentage of the base contribution rate and can add as much as 75% to the monthly medical aid contribution.
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