Through having membership of a medical scheme, members often regard it their right to claim medical benefits. After all, are they not the ones paying for it? Having to pay a monthly contribution without receiving anything in return simply does not seem fair, yet few members seem to understand the importance of securing peace of mind within a medical scheme environment.
Ms Marthie Bester, Marketing Director of the Selfmed Medical Scheme, explains: “ Unlike household or car insurance, a medical scheme is prohibited by law from increasing members’ contributions on account of how often or much they claim during a year. Yet the medical scheme must fund all claims from the contributions it receives from members.”
“Think of it in terms of a big bucket with holes at the bottom”, Ms Bester continues. “As you pour water in at the top, the water starts leaking out at the bottom. If you do not continue to pour more water into the bucket, it will quickly run empty.”
Medical schemes operate in exactly the same way. The benefits paid are funded by the contributions received and if the level of claims exceeds the contribution income, a scheme’s future viability becomes jeopardised.
As non-profit organisations, medical schemes’ objective is not to incur a profit but to enable the responsible management of the contributions paid by its members. By law, all medical schemes must have reserves, representing a minimum of 25% of its accumulated funds, to act as a buffer in years where claims experience exceed income, yet few medical schemes manage to attain or maintain this level of security.
Selfmed Medical Scheme is one of the medical schemes that proudly maintains a reserves level of more than 25%, yet, according to Ms Bester, scheme reserves should not represent a long-term solution. “Selfmed is committed to offering its members security and peace of mind, yet would welcome greater awareness from medical aid members about the responsible use of their benefits.”
She concludes: “If only more members would realise the extent of the peace of mind that they are buying. An annual contribution of R9 348 for a principal member on a hospital plan (Selfmed’s MEDXXI option) must fund any unforeseen hospital event, regardless of whether it may end up costing hundreds of thousands of rands.”
Now ask yourself - if all of us were intent on making the most of our benefit entitlement, would there be any “water” left in the bucket?
(Selfmed, January 2010)