Are You Paying Too Much (Or Too Little) For Your Medical Cover?

Navigating medical schemes and health insurance in South Africa can be overwhelming. With so many options, it’s easy to end up underinsured (not having enough cover) or overinsured (paying for more than you need). Both scenarios can drain your finances and impact your access to quality healthcare. Let’s break it down and help you find the right balance.

Underinsured? These Warning Signs Could Cost You

In South Africa, over 8 million people rely on medical aid, yet many find their cover inadequate when they need it most. With private healthcare costs rising by an average of 10% annually, getting the right cover is more critical than ever. If you’re underinsured, you might experience:

Overinsured? You Could Be Wasting Money Every Month

Medical aid is a significant expense - yet 60% of insured South Africans don’t use all their benefits, meaning they could be paying for cover they don’t need. Signs you might be overinsured:

The Importance of Gap Cover: A Must-Have Today

Even with comprehensive medical aid, there can be shortfalls between what your medical scheme covers and the actual costs incurred, especially for in-hospital procedures. Gap cover is designed to bridge this gap, ensuring you're not left with unexpected expenses.

Get Expert Advice Without Paying Extra

Many people don’t realise that expert healthcare advice is already included in their medical scheme premium - there’s no extra charge for using a healthcare consultant. A specialist can help you avoid paying for benefits you don’t need or guide you to better cover without unnecessary costs. It’s about making sure every rand you spend on medical aid works for you.

How to Find the Right Balance

The key to getting the right cover is regularly reviewing your medical aid plan to ensure it matches your needs and budget. Here’s how:

The Hidden Retirement Cost: Healthcare Expenses Are Overlooked

As an employer, you invest in your employees’ future through retirement benefits, but one critical factor is often overlooked - healthcare costs in retirement. Rising medical expenses can significantly impact retirees' financial security, leading to unexpected reliance on family, government aid, or even delaying retirement all together.

Why Employers Should Care 

Healthcare inflation outpaces general inflation, making medical expenses one of the biggest threats to a secure retirement. Employees who underestimate these costs may struggle financially post-retirement, potentially returning to the workforce or relying on financial assistance. This challenge affects both productivity and long-term workforce planning.

A recent Just SA survey highlights the issue:

These figures underscore a lack of preparation, leaving many employees vulnerable to rising healthcare costs they have not accounted for.

The Reality of Healthcare Costs in Retirement

Many employees assume their medical aid will cover all their needs in retirement, but essential assistive devices and chronic medication are often excluded. According to Statistics SA:

Healthcare inflation is outpacing general inflation. Rising healthcare costs can rapidly deplete retirement savings, leaving employees with fewer options to maintain a comfortable lifestyle. Without proactive planning, these costs can erode financial security, increasing the risk of financial dependence post-retirement.

How Employers Can Help 

Forward-thinking employers can take steps to ensure their employees are better prepared:

  1. Educate Employees on Healthcare Costs in Retirement: Offer financial wellness programmes that include education on the impact of healthcare inflation and the need for dedicated retirement healthcare savings.
  2. Introduce SmartAid as a Retirement Healthcare Solution: NMG SmartAid provides employees with a way to save specifically for medical aid contributions in retirement. This solution includes a personalised assessment to determine if they are on track and an annual statement reflecting their progress.
  3. Encourage Early and Tax-Efficient Savings: The earlier employees start saving, the less they need to put away each month. Encourage tax-efficient savings options, such as tax-free savings accounts or retirement annuity funds, to help employees prepare for healthcare costs.

Investing in employee financial wellness today ensures a stronger, more resilient workforce - one that can retire with dignity, rather than uncertainty.

Why Group Gap Cover Is a Game-Changer for Employees and Employers Alike

Over the years, there have been many gap cover products launched in the market that target individuals. Group gap cover schemes, however, offer many more advantages and benefits to both the employer and the employee. The payment of premiums is streamlined, there is continuity of coverage for employees who resign, and employers have peace of mind knowing that their employees have a financial safety net for unexpected medical bills. Furthermore, whether the gap cover is offered on a compulsory or voluntary basis, corporates can offer employees additional benefits by negotiating group institutional rates and value adds.

What is gap cover?

Gap cover is a short-term insurance product that covers the shortfall between the medical scheme's rates and the rate that private healthcare professionals charge. It doesn’t replace comprehensive medical cover, it complements it. The good news is that gap cover is affordable, and it could save your employees thousands of rands if they find themselves burdened with unexpected medical expenses and out-of-pocket costs that they didn’t budget for. Gap cover should no longer be seen as a luxury. It is a necessity. If you take the wellbeing of your employees seriously, it is important to make sure they are not left financially destitute in a medical emergency. You can protect their financial future.

Employer versus individual basis

When you arrange gap cover as part of an employee benefit programme, your employees are often given preferential rates, as well as reduced waiting periods. Some providers offer additional value adds such as trauma counselling, top-up cancer cover and lump-sum pay-outs for first cancer diagnoses. It is also important to remember that cost is not always the key indicator of value. You need to compare the benefits you can get for your employees at the cost quoted because you will typically get additional benefits with the corporate offering. The individual costs for group arrangements need to be quoted on a case-by-case basis depending on the number of employees to be covered, as well as the unique benefits required per employer.

The advantages of group gap cover

One of the many benefits of offering group gap cover is improved productivity. Occupational Care South Africa (OCSA) reported that absenteeism costs the South African economy from R12 billion to R16 billion per year, while Human Capital Review estimates the cost to be R19.144 billion annually. Besides improving productivity, gap cover also offers employers these important benefits:

Your employees need to be productive for your business to perform at its best. If you offer your employees gap cover, they will also recover faster and return to work because they have not had to wait until they have enough money to cover their medical expenses. Gap cover provides a safety net that gives both the employee and the employer peace of mind.

A payroll deduction makes paying for gap cover easy

As an employer, you have the choice of paying the gap cover premium for your employees or offering it to them but implementing a payroll deduction. With a payroll deduction you know the premiums will always be paid on time. In addition, your employees don’t feel the deduction because it is taken off before they get their salary in the bank. This provides all parties – employee, employer and provider – with a simplified payment process that ensures seamless premium contributions. This payment method is economical and efficient. It is also convenient for everyone involved. It ensures that your employees don’t slip on the payment of the premiums, giving them another safety net that provides financial peace of mind.

Your employees enjoy continuity of coverage

The continuity of gap cover is an important concern for many employees when they resign from a company. Some gap cover providers in South Africa offer underwriting policies that allow employees to transition from a group scheme to an individual policy with minimal underwriting. This means that, in some cases, they can continue their gap cover without having to go through extensive medical assessments, which could potentially result in higher premiums or exclusions. To make sure there is no break in membership, employees leaving a company can arrange to continue making payments directly to the insurer.

Overall, it's important to recognise that continuity of gap cover is achievable when leaving an employer. Remember to encourage your employees to research their options, communicate proactively and understand the terms and conditions of their gap cover policy. This will ensure they enjoy a smooth transition and continue to receive the benefits they need to cover their medical expenses effectively.

The value of gap cover

In an article published in BusinessTech (2023), there is a real-life scenario of how gap cover helped Mr Smith, 69, in January while visiting his children in KwaZulu Natal. The article said, “Whilst attempting to pack a box into a storeroom, he tripped and fell over an extension cord. Initially, he did not give the incident much thought until the back pain began setting in.” He was later diagnosed with Sciatica in the lumbar region, a condition that required a spinal fusion together with a laminectomy to decompress the nerve.

“Total treatment costs amounted to over R147,000, with the medical aid covering only a small portion of the bills (R20,251 to be exact). Thankfully for Mr Smith, he had taken out medical gap cover through Total Risk Administrators, which took care of the outstanding balance. His story illustrates the importance of investing in short-term insurance, like gap cover, to settle the shortfall between a medical scheme tariff and the applicable rates charged by private healthcare providers.”

The importance of employee wellbeing in the workplace

There is much value in including gap cover in a company’s holistic approach to employee wellbeing and satisfaction. Research shows that as much as 76% of South Africans run out of money before the end of the month. Furthermore, 89% of South African employees worry about being able to pay their bills at the end of every month. Added to this, unexpected medical bills that these employees didn’t plan for can only result in a heavier financial burden and strained wellbeing in the workplace.

When employees are under pressure financially, they find it difficult to concentrate, their morale is low and they are less productive. On the other hand, offering them gap cover as part of a holistic employee benefits package makes them feel cared for and gives them relief. It is also a drawcard for attracting top talent. It really is a small cost to cover when you think of the benefits you will see over the long term.

NMG has experienced healthcare consultants who can help you assess which gap cover provider and plan would best suit your business. They have extensive experience with different providers so they can review requirements and give you quotes on a solution that will best suit your company.

T&Cs apply. NMG Consultants and Actuaries (Pty) LTD is an authorised financial services provider FSP 12968

The Silent Threat: Why Cancer Awareness and Early Detection Matter

February 4th marks World Cancer Day and is the second leading cause of death globally. Research conducted in 2020 across 54 African Countries shows that South Africa ranks third highest for new cases of cancer (close to 110,000) across the continent. It is important to be aware of the different types of Cancer, and what are their signs and symptoms to detect early diagnosis.

What is Cancer?

Cancer generally means abnormal and uncontrolled increase and growth of cells in a particular part of the body. Almost all cancers can spread to other regions, either directly by invading and infiltrating surrounding structures, or through the blood stream or lymphatic system. Cancer is not one condition, rather there are over 200 different types of cancer. It is for that reason that it is not possible to have one treatment or tablet that can cure all cancers. Cancers are generally named after the part of the body where they originate. The common cancers are those of the breast and cervix in women, and of the prostate gland and colon in men.

How is cancer diagnosed?

Some cancers take longer to diagnose because they are hidden away deep in the body, while others have no symptoms for a very long time in the early course of the disease. In addition, it is possible to periodically test or screen for some cancers, mainly those of the breast, cervix, and prostate glands, thus ensuring early detection and treatment. Ultimately, confirming the presence of cancer is made by performing a biopsy, which is the process of obtaining a tumour sample.

The samples are then sent to a laboratory for pathologists to confirm the diagnosis and categorise the type of cancer. Pathology and radiology services are essential in guiding the diagnosis, treatment, and management of cancer. This includes determining the stage of the disease, which involves the absence or presence of a tumour spreading from the site where it started. There are blood tests that are also helpful in diagnosing certain types of cancers.

What are some of the symptoms?

Signs and symptoms of cancer depend on the area of origin, and the extent of disease. In addition, treatment can sometimes lead to symptoms that are obvious and more debilitating than those caused by the cancer itself. Symptoms include unexplained loss of weight, loss of appetite, change in bowel habits, excessive tiredness, pain, nausea and vomiting, difficulty in passing urine, and many others. Common treatment side-effects from cancer therapy are loss of hair and discoulouration of the nails.

How can cancer be prevented?

Some people are born with genes that increase their risk of developing cancer, either early or later in life. However, a significant number of cancers can be prevented from being lethal, through early detection and treatment. It is also worth noting that even babies can get cancer, and in fact there are certain types of cancers that are only found in children. Some of the following factors are responsible for increasing one’s risk of developing cancer, and managing them can be lifesaving:

Exposure to chemicals and substances that cause cancer also often happens in certain types of working environments, and it is the responsibility of both the employer and employee that the appropriate safety measures are put in place.

How is cancer treated?

Treatment depends on the type of cancer one has, and can involve a combination of surgery, chemotherapy, and radiation therapy. In addition, the type of treatment option chosen depends on whether the cancer has spread to other organs, its anatomical location in the body, and the patient and family’s needs. In instances whether there is extensive disease spread, the affected individual is offered palliation, which is supportive care and pain management. It is also worth noting that currently there is no evidence to support claims that alternative remedies are better than conventional treatments to treat cancer, or even that they offer any form of objective benefit.

Cancer treatment is led by a multidisciplinary team, which includes nurses, general practitioners, psychologists, radiation and medical oncologists, surgeons, radiologists, pathologists, and many other health professionals. In addition, key among these is good social support, which includes partners and spouses, family, work colleagues, friends, and cancer support groups.

While a positive attitude generally improves one’s quality of life, whether healthy or sick, there is no evidence to support the commonly held view that a positive attitude has a bearing on whether one is cured or not. It does of course strengthen one’s mental resolve and can help avoid the depression that often accompanies a diagnosis of cancer, but not responding to treatment does not imply that one did not have a positive attitude, or that one was not willing to “fight”, a term that is often used in this context.

The content in this communication is for information purposes and is not intended to be detailed advice, you should seek the advice of your physician or a qualified healthcare provider with any questions you may have regarding a medical condition.

Making the Right Healthcare Choices for 2025: What You Need to Know

With medical scheme contribution increases averaging around 10% in 2025 – a rate significantly higher than salary inflation – many people are finding private healthcare increasingly unaffordable. This makes it more important than ever to re-assess your current plan to ensure it remains the right choice for you and your family.

Choosing the right medical scheme is about more than just finding the most affordable option. It’s about balancing your healthcare needs with your budget and making informed decisions that will protect both your health and your financial wellbeing in 2025.

Why Consulting with a Healthcare Broker is Crucial (And Doesn’t Cost You a Thing)

Navigating the ins and outs of medical schemes can be complicated. That’s why it’s crucial to consult with an expert who can assess your current situation and help guide you toward the best options. The great news is that this expert service is already included in your monthly premium – at no extra cost to you.

As independent advisors, NMG Benefits can help you explore your healthcare utilisation, needs, and budget, regardless of which medical scheme you’re with. Whether you’re thinking of upgrading, switching providers, or just need a second opinion, we are here to guide you. Simply email us at healthcare@nmg.co.za to get started.

Don’t Overlook Gap Cover: A Necessity for Comprehensive Protection

In South Africa, gap cover has become an essential addition to your medical scheme. Even with a solid medical scheme, there may still be gaps in your coverage. For instance, certain medical procedures or specialists’ fees might not be fully covered by your scheme, leaving you with out-of-pocket costs. That’s where gap cover comes in.

Gap cover is an additional insurance product designed to cover the difference between what your medical scheme pays and the actual costs of treatments, such as specialist fees or certain medical procedures. This can save you from having to pay the difference yourself. Employers often offer group gap cover at a significantly lower cost than if you were to sign up individually.

By signing up for gap cover through your employer, you could save up to 50% compared to signing up on your own, while ensuring you’re better protected against high medical costs.

The Importance of Affordability and Access to Healthcare

Many employers offer primary care cover, often through employer group schemes, which ensures that even employees on lower incomes can access essential healthcare services. This includes treatment for chronic conditions like hypertension or visits to general practitioners. These services are offered through a network of providers who meet strict standards and often have extended hours to fit your schedule.

Take Control of Your Healthcare and Wellbeing

Choosing the right healthcare benefits doesn’t just help protect your physical health – it can also enhance your financial wellbeing. With the right support and guidance, you can make healthcare decisions that work for you, your budget, and your future.

Remember, your employer is there to help guide you through this process. By offering access to expert advice, they ensure you can make the best decisions for your health and peace of mind. Don’t wait until the last minute – start reviewing your options today, and feel confident that you’re making the right choice for 2025.

Shining a Light on Breast Cancer

October is a special month in the calendar, for being Breast Cancer Awareness Month. This dedicated time serves as a poignant reminder of the significance of breast cancer awareness, education, early detection, and support for those affected by this pervasive disease. As we wear our pink ribbons and unite to raise awareness, let's delve into the world of breast cancer, its impact, and the importance of vigilance and empowerment in the face of this challenging adversary.

Breast cancer is a global health concern that affects millions of individuals, transcending borders, cultures, and backgrounds. It is the most common cancer among women worldwide, and it doesn't discriminate – it can strike anyone, regardless of age or ethnicity. This universal threat underscores the need for continuous awareness and education.

Early Detection: A Game Changer

Early detection remains a cornerstone in the battle against breast cancer. Mammograms, clinical breast exams, and breast self-exams are essential tools in identifying breast cancer at its earliest, most treatable stage. According to the Cancer Association of South Africa (CANSA), breast cancer is the most common cancer in women of all races in South Africa, apart from skin cancer, with a lifetime risk of 1 in 27. They further recommend that women start annual mammogram screenings at the age of 40, with an option of earlier screening for those at higher risk.  

Being breast aware means knowing your own body, understanding the normal look and feel of your breasts, and promptly reporting any changes to your healthcare provider. Regular breast self-exams can be an integral part of this self-awareness journey. The sooner an anomaly is detected, the better the chances of successful treatment and survival.

Awareness

Breast cancer awareness goes beyond early detection. It encompasses education and understanding, breaking down myths and stigmas, and encouraging conversations about breast health. Awareness is about knowing your risk factors, understanding your family history, and staying informed about the latest advances in breast cancer research and treatment.

Informed individuals are empowered to make critical decisions about their health. This knowledge can lead to lifestyle changes that reduce risk factors, such as maintaining a healthy diet, engaging in regular physical activity, and minimising alcohol consumption. By fostering a culture of awareness, we empower ourselves and our communities to take control of our health.

Support

A breast cancer diagnosis can be emotionally and physically challenging, affecting not only the individual but also their loved ones. Support is an integral part of the journey. During Breast Cancer Awareness Month, it's essential to acknowledge the strength and resilience of those who have faced or are currently facing breast cancer.

Support can come in various forms, including the invaluable presence of family and friends, support groups, and healthcare professionals. The journey is not one that anyone should face alone, and it's a testament to human spirit that individuals facing breast cancer often find themselves surrounded by a web of compassion and solidarity.

Symptoms

  1. Lump in the Breast: The most common symptom of breast cancer is a painless lump or mass in the breast. This can be felt during self-examination or by a healthcare provider.
  2. Breast Changes: Other changes in the breast that may signal breast cancer include swelling, redness, dimpling, or puckering of the skin.
  3. Nipple Changes: Changes in the nipple, such as inversion, discharge (other than breast milk), or a scaly rash, can be symptoms of breast cancer.
  4. Breast Pain: While breast pain is not usually a common symptom of breast cancer, it can sometimes be a sign.
  5. Lymph Node Swelling: Swelling of lymph nodes in the armpit or around the collarbone can be an indication that breast cancer has spread to these areas.

It's important to note that many breast lumps are not cancerous, but any unusual changes or symptoms should be promptly evaluated by a healthcare professional.

Treatment

The treatment for breast cancer depends on various factors, including the stage of cancer, the type of breast cancer, and the patient's overall health. Treatment options may include:

  1. Surgery: This is often the first step in treating breast cancer. Surgical options include lumpectomy (removing the tumour and a small amount of surrounding tissue) or mastectomy (removing the entire breast).
  2. Radiation Therapy: This involves using high-energy X-rays to target and destroy cancer cells or shrink tumours. It is often used after surgery to eliminate any remaining cancer cells.
  3. Chemotherapy: Chemotherapy involves the use of drugs to kill or slow the growth of cancer cells. It can be used before or after surgery to treat breast cancer.
  4. Hormone Therapy: This is typically used for hormone receptor-positive breast cancers. Hormone therapy can block the effects of hormones (oestrogen and progesterone) that stimulate the growth of certain types of breast cancer.
  5. Targeted Therapy: Some breast cancers have specific molecular targets, and targeted therapies are designed to inhibit these specific targets. HER2-positive breast cancer is an example where targeted therapies like Herceptin are used.
  6. Immunotherapy: Immunotherapy is an emerging treatment for some types of breast cancer. It works by stimulating the body's immune system to fight the cancer.
  7. Clinical Trials: Many breast cancer patients may be eligible for clinical trials, which test new treatments and approaches that are not yet widely available.

Treatment plans are personalised, and the combination of therapies used will depend on the individual case. It's essential for patients to discuss treatment options and potential side effects with their healthcare team to make informed decisions about their care. Early detection and prompt treatment significantly improve the prognosis for breast cancer. Regular breast self-exams, clinical breast exams, and mammograms can aid in early detection.

Over the years, there have been significant strides in breast cancer research and treatment. These advancements have improved diagnosis, treatment options, and survivorship rates. Targeted therapies, immunotherapies, and precision medicine have opened up new possibilities in the fight against breast cancer.

It is important that we maintain vigilance about our own breast health, encourage our loved ones to do the same, and stay engaged in the conversation about breast cancer. Together, we can make a difference in the lives of those facing breast cancer and work towards a future where breast cancer is no longer a life-threatening diagnosis.

Here’s how companies can support their employees’ mental health

South Africa’s workplaces are battling a silent mental health crisis, and according to a recent study by Sapien Labs’ fourth annual Mental State of the World Report, South Africa has the worst mental wellbeing levels ranking 69 out of 71 countries, with little improvement post the Covid-19 pandemic.

Businesses have a critical role to play in easing the effects of mental health issues through Employee Assistance Programs (EAPs), by investing in the wellbeing of their employees and offering support, says Gary Feldman, Executive Head of Healthcare Consulting for employee benefits firm NMG Benefits.

“Growing numbers of South Africans are feeling overwhelming stress, anxiety, burnout, and depression. This affects their relationships, quality of life, and productivity, to the point where they no longer can deliver on the most basic of requests. Even responding to an email can be an anxiety provoking task,” said Feldman.

The average person spends one-third of their life at work, so understanding employee wellness is crucial. It doesn’t just speak to the physical health of employees, but also their emotional and mental wellbeing, and even their financial and legal stability. Employees who are happy and healthy are more resilient and can better manage change.

South African employers who take a proactive and flexible approach to supporting their people are seeing real improvements in productivity. There is a clear correlation between having an effective Employee Assistance Program and absenteeism management program in place, and improved productivity.

Research suggests workplace initiatives designed to promote good mental health among employees can provide companies with a measurable return on their investment. According to the World Health Organisation, companies can see a $4 return on every $1 they put towards treating common mental health concerns.

Some of the ways in which EAPs can help companies manage their employees mental wellness include:

Counselling: Confidential counselling services help employees address personal and work-related issues that are affecting their mental and emotional health. These services are typically offered by external licensed mental health professionals, who keep all information confidential.

Stress Management: EAP programs often provide stress management resources to help employees manage stress and promote overall wellness. These services may include workshops, stress management tools, counselling specifically around stress management and online resources.

Financial and legal support: Financial struggles are one of the biggest sources of stress in the workplace. EAPs can help employees access legal and financial advice to manage their financial and legal wellbeing, both in their personal life and at work. This includes advice on estate planning, debt counselling, and even assisting with divorce proceedings.

Workplace support: A healthy work environment promotes mental wellbeing. Workplace support can include providing training and resources to managers to identify and address potential issues in the workplace. EAPs can also support employee wellbeing through flexible working arrangements, employee wellness programs and peer support programs.

Cultivate empathy: Cultivating an environment focused on empathy is key to harnessing the power of productivity. Organisational success relies on a compassionate and inclusive culture.

“EAPs play a critical role in addressing workplace mental health issues by providing support to employees and reducing the stigma around mental health. Employers who invest in their employees in this way can maintain overall wellbeing in the workplace. This increases productivity, job satisfaction, employee engagement and overall performance,” said Feldman.

The impact of the NHI on companies

The signing of the National Health Insurance (NHI) Bill in South Africa marks a significant shift in the country's healthcare landscape, with notable implications for companies and employers. The NHI aims to provide universal health coverage, ensuring that all South Africans have access to healthcare services regardless of their socio-economic status. 

Legal and administrative challenges

The NHI is expected to face several legal and administrative hurdles that could delay its full implementation. Potential constitutional challenges and disputes over the specifics of the law and its rollout are anticipated. These legal battles could prolong the transition period, making it even more critical for companies to keep existing employee benefits intact to protect against gaps in coverage and ensure continuous healthcare provision for their workforce.

Complexity and scale

Implementing a universal healthcare system in a country as large and diverse as South Africa involves overcoming numerous logistical and operational challenges. Integrating various health information systems, ensuring all stakeholders are on board, and adequately informing the public about the changes are significant tasks. The complexity and scale of this undertaking means that the NHI’s full implementation will likely take years, further emphasising the need for businesses to maintain current benefits and prepare for a drawn-out transition.

Advising against cancelling employee benefits

Maintaining current benefits during the NHI rollout is crucial for several reasons. Firstly, until the NHI is fully operational, private medical aid schemes will continue to function as they currently do. Employers and employees should maintain these benefits to ensure continued access to quality healthcare services. Secondly, even after the NHI is fully implemented, there may be gaps in coverage. Private medical schemes will still play a role in covering services not included in the NHI package, making it essential for comprehensive healthcare coverage.

The uncertain timeline for the NHI’s full implementation adds another layer of complexity. Given the potential legal delays and the phased rollout approach, maintaining current benefits ensures that employees are protected. This stability is crucial for employee wellbeing and productivity.

Impact on private medical schemes

The introduction of the NHI will redefine the role of private medical schemes. Once fully implemented, private medical schemes will be restricted to covering services not included in the NHI, shifting from being the primary source of healthcare funding to providing complementary coverage. This change is expected to reduce the customer base for private insurers, potentially impacting their revenue and business models.

However, private medical aids will remain relevant by offering coverage for specialised services and higher-tier healthcare options that may not be available through the NHI. This niche role could still attract a segment of the population seeking additional coverage, ensuring that private medical aids continue to play a vital role in the healthcare landscape.

Implications for companies

The transition to the NHI will require companies to make several administrative adjustments. Employers will need to update payroll systems to accommodate mandatory contributions to the NHI, which could increase administrative costs. Additionally, businesses will need to reassess their employee benefits packages to determine which benefits are still necessary and valuable under the new system.

Financial impact on companies

One of the primary concerns for companies is the financial impact of funding the NHI. The NHI will be financed through general taxation, contributions from individuals earning above a certain threshold, and mandatory monthly contributions from employees, which will be deducted from salaries similarly to the Unemployment Insurance Fund (UIF)​​. This means that companies will need to adjust payroll systems to accommodate these new deductions and may face increased administrative costs.

Impact on employee benefits

For employers, especially those who offer private medical scheme cover as part of their employee benefits, there will be significant changes. Currently, medical schemes operate independently, but once the NHI is fully implemented, these schemes will be limited to covering only those services not included in the NHI package. This transition will require employers to reassess their benefits packages and possibly renegotiate terms with private health insurers to align with the new healthcare framework.

Compliance and administrative burden

Companies will also need to navigate the complexities of compliance with the new law. This involves understanding which employees are affected, ensuring proper deductions are made, and keeping abreast of any updates or changes to the implementation timeline and coverage specifics. The gradual rollout and potential legal challenges suggest that there will be ongoing adjustments required over the coming years​.

Impact on healthcare costs

The NHI aims to address the disparities between the public and private healthcare sectors by reimagining resource allocation and ensuring more equitable access to healthcare services​​. For companies, this could mean a shift in how healthcare costs are managed. While the intention is to make healthcare more affordable and efficient, the actual impact on costs will depend on the effectiveness of the NHI's implementation and the resolution of any funding challenges.

Potential benefits and challenges

From a broader perspective, the NHI could lead to a healthier workforce, which in turn could enhance productivity and reduce absenteeism due to health-related issues. However, the uncertainty surrounding the NHI's full implementation, the potential for legal disputes, and the lack of a detailed funding plan pose significant challenges​​.

Strategic considerations for companies

Companies should begin by conducting impact assessments to understand how the NHI will affect their operations and employee benefits. Engaging with legal and financial advisors to navigate the new requirements and staying informed about legislative updates will be crucial. Additionally, companies might need to invest in employee education programmes to help their workforce understand the changes and the benefits of the NHI.

While the NHI represents a significant step towards universal healthcare in South Africa, its impact on companies will be multifaceted, involving financial, administrative, and strategic considerations. Employers will need to prepare for these changes proactively to ensure a smooth transition and to leverage any potential benefits that a healthier, more equitable healthcare system might bring.

T&Cs apply. NMG Consultants and Actuaries (Pty) LTD is an authorised financial services provider FSP 12968

Don't let healthcare costs derail your retirement: Plan ahead with SmartAid

Retirement is meant to be a time of rest after years of hard work, but one of the most significant expenses retirees face is healthcare. The rising cost of healthcare can derail retirement plans, especially in the event of a major health issue requiring ongoing treatment. Just SA’s survey revealed alarming statistics:

These figures suggest that many South Africans have not accounted for healthcare costs in their retirement planning. These statistics prove without a doubt that not only are the majority of South Africans leaving retirement planning until it is too late – if they even plan at all – the rising cost of healthcare is not included in their considerations.

Fact: Healthcare costs rise with age and are often underestimated

Many people don’t realise that medical aids don’t always cover assistive devices and other necessary aids. Statistics SA estimates that:

Fact: Healthcare inflation outpaces general inflation

Healthcare costs tend to rise faster than general inflation, putting additional financial strain on retirees. Without proactive planning, these rising costs can quickly erode retirement savings, making it challenging to maintain a comfortable and healthy lifestyle in retirement.

Plan ahead with SmartAid

To address the critical need for healthcare planning in retirement, try the NMG SmartAid calculator, which helps you save for your medical aid contributions after you retire.

Alternatively, enquire about SmartAid, which allows a member or employee to invest in a retirement annuity separately from their pension or provident fund for an enhanced quality of life in retirement. It includes an assessment of each member’s circumstances to determine if they are on track to meet their specific needs, along with an annual personalised statement reflecting their status.

Plan for your healthcare costs today

Your healthcare costs in retirement depend on three main factors: your health status, your medical scheme plan option, and when you start saving. Taking control of these factors now can significantly impact your future financial security:

When you start saving: the earlier you start, the less you need to save monthly. Tax-efficient saving options like tax-free savings accounts or retirement annuity funds can boost your retirement savings.

T&Cs apply. NMG Consultants and Actuaries (Pty) LTD is an authorised financial services provider FSP 12968

The NHI Bill has been signed, what now?

On 15 May 2024, President Cyril Ramaphosa signed the National Health Insurance (NHI) Bill into law. 

NMG supports the goal of expanding universal healthcare for all South African citizens. The National Health Insurance Bill in its current format is probably not achievable and will face many legal challenges. The risk of lengthy court battles is real, this will inadvertently prolong the uncertainty and affect the timely implementation of essential healthcare reforms. 

No impact on medical schemes for the near future 

The implementation of the NHI will be a lengthy process. The private healthcare system will carry on operating in its current format until the NHI is fully implemented. As per section 33 of the Bill, only once the Bill is fully implemented will medical schemes and other healthcare insurance providers be able to offer supplementary cover, which could take 10 to 15 years. 

The way forward

Our advice during this time is clear: maintaining your medical scheme or medical insurance product is crucial. Cancelling could leave you, or your employees, vulnerable without cover, relying solely on state facilities or having to self-fund medical expenses. Public and NHI facilities will require time to deliver services at levels that members may be accustomed to. Upholding these funding mechanisms is wise given the potential for future changes – so if you’re undecided as to whether to join a Medical Aid or medical insurance plan, our advice is to do so. There’s no downside, and you’ll at least have good funding for your healthcare needs in the meantime.

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