Medical schemes on drive to recruit younger people as their membership ages

John Maytham gets more insight from Neesa Moodley, financial journalist at Daily Maverick.

There's a growing trend for younger people to gravitate towards signing up for medical insurance, rather than going the more traditional medical scheme route.

As a result, medical schemes are coming up with new benefit options and incentives in an effort to attract younger, healthier members, writes Neesa Moodley for Daily Maverick.

John Maytham asks the financial journalist about the way these schemes work in the sense that younger members would pay the same premiums as their ageing counterparts.

Moodley describes it as a pool benefit, where if you were on the same option for instance as your 24-year-old son you'd pay the same monthly contribution, with the younger members basically cross-subsidising the older ones.

"I don't have the percentages to hand, but I can say that the people on medical scheme cover are ageing. Since 2004, the number has shifted from about 7 million to 9 million."

"Over 20 years, that's not a lot of growth, which tells us the market is really stagnant."

Neesa Moodley, Financial Journalist - Daily Maverick

Moodley believes the number of young people opting for medical insurance is far higher than what medical schemes estimate.

Considering the current cost of living crisis, it makes sense that these potential members are choosing the more affordable option.

"A younger person who doesn't have health issues would opt for this, especially if you're not using chronic medication, not getting to a hospital very often and it's more like an emergency thing... maybe the day-to-day doctor benefits you need once in a while."

"With a medical scheme, even if it's just a basic hospital plan, you're looking at upwards of R1 000 a month. With a medical insurance benefit on the other hand like well-known TymeHealth and Dis-Chem Health, you're paying R350 to R450 a month."

Neesa Moodley, Financial Journalist - Daily Maverick

She cautions young people with a reminder that if you do take medical insurance and then want to join a medical scheme later in life, say after the age of 35, you'd get slapped with a late joiner penalty fee.

Scroll up to listen to the interview and click here to read Moodley's comprehensive article