30 September 2011

A grudge purchase

Many of us have a love-hate relationship with our medical schemes. We love the peace of mind it buys and we hate what it costs us, says Susan Erasmus.


Many of us have a love-hate relationship with our medical schemes. We love the peace of mind it buys and we hate what it costs us, says Susan Erasmus.

Even though I hide it very well, there is very small part of me that hopes that the NHI will manage to give me the same kind of peace of mind at a fraction of the cost. As far as matters of the state are concerned, however, I do realise that this is probably the triumph of hope over experience. It’s a small thing, but please don’t take this away from me.

So why do I continue spending a fortune on a medical scheme? Apart from having my tonsils removed when I was a baby, I have never, touch wood, been in hospital.

There are two reasons: one, it is a condition of my employment (I was so pleased to get the job 11 years ago, I would have sold my soul to the highest bidder at the time – just don’t tell my employer that) and secondly, the insurance industry has scared the crap out of all of us. Probably with good reason, but boy, do they hype it up.

Plain and simple: the whole industry runs on selling fear. You only have to see the insurance ads on TV to know that this is true. The big bogeyman is always: what will happen to your family when you die? Or get really sick? Or have a particularly nasty accident?  No one ever holds back on sharing the horrors of destitution, or the embarrassment of being penniless.

And it's always something like a father and spouse who gets flattened by a bus and leaves his family destitute. Or a family who is in an accident and can't pay the medical bills, or a single mother who gets cancer. Or a house that burns down, gets burgled, or has shifting foundations. Or how a friend of a friend with no medical insurance managed to run up a bill of R75 000 in two days in a private hospital after slipping in the street.

The news is never good.

And let's face it, in real life the news is often bad. And bad news always costs you heaps of money in some way or another. And it’s always money you don't have. Which is where the insurance industry comes in.

Let's get back to your medical scheme. The reason why you're prepared to fork out thousands for this every month, is because the thought of landing up really ill in a state hospital that might or might not be dodgy is just too much to bear. It certainly isn't that you can't think of better ways to spend your money. I could go on a trip to Europe every year for what my medical scheme contributions cost me. Or Brazil, or the Maldives. You get the picture.

And yet I carry on paying without moaning too much.

I always had a vague idea that medical schemes sat back and raked in the cash from their innocent and hardworking members. And then, much to my surprise, six years ago I was elected as a member trustee on our closed medical scheme. It is an experience I recommend to everyone.

I am sure there are some scheme administrators out there who are in it for the money, but I was startled by one incontrovertible fact: a closed scheme only gets in member contributions, and apart from some relatively small running and admin costs, only spends what members claim.

For every member who claims more than they have paid in, there will be many who claim less than they have paid in. That’s how it works. It’s called cross-subsidisation. It’s just the luck of the draw. Or the lack of luck. No one wants to be ill enough to have to spend their full hospitalisation limit. But it happens, and it could happen to you.

I shall stop now, because very soon I expect a call from a life insurance company offering me a job.

OK, so what am I saying?

In short, I need the peace of mind that my medical scheme gives me, as I am scared of what might happen to me in a state hospital. This is one area where I definitely do not like living on the edge.

But I wouldn’t be first in line to complain if a magic fairy waved her wand and made the NHI cheap and reliable.

Don’t begrudge me my half hour in Cloud Cuckooland. It’s the place I go every month when I remember to buy a lottery ticket. A girl needs her dreams.

(Susan Erasmus, Health24, September 2011)




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