People are downgrading their medical plans as they cannot afford the premiums — but at what cost?

Roughly 20 months ago, the Covid-19 pandemic struck and life as we knew it was turned upside down. For many, the pandemic was a huge wake-up call, spotlighting our financial and physical vulnerability. The security of knowing that if you did catch the virus you would get access to private healthcare was just not there for most South Africans. Medical scheme premiums are simply out of reach for most of the nation — in fact only 15.2% of our population have it.

How big an effect does the high cost of medical care have on South Africans? Surveys consistently place medical costs as one of the top two money stressors. First is debt and second is medical expenses. And the two are often co-dependent, because up to 70% of South Africans don’t have an adequate emergency fund, which means when something unplanned happens they must borrow money to pay for medical expenses, which puts them in debt — debt that they struggle to get out of.

The impact of the prohibitively high cost of healthcare is not just felt in our pockets. We feel it directly in our health too. In my practice as a financial coach and certified financial planner, I frequently hear anecdotally about people skimping on the full medical treatments they need because of the high costs. For instance, seeing a doctor but not filling out the prescription afterwards because the medication is just too costly. Or taking half doses of pills to make the prescription last longer. In the end we are often left with a far worse medical issue.

Another trend is for people to downgrade their medical scheme plan because they simply can’t afford the premiums — but at what cost? One single mom shared her story. She “downgraded” her plan to save money. Then a few months later her son’s eyes started acting up. She needed to get him glasses. Her other child needed braces. Unfortunately, he then took a soccer ball to the face and had to have the braces redone. The basic medical scheme plan didn’t cover any of this, which put the mom more than R10,000 out of pocket. She didn’t have an emergency fund either.

We don’t have to look far to find evidence of just how tough South Africans have it right now. The 2021 Sanlam Benchmark research found 80% of polled stand-alone retirement funds and participating employers of umbrella funds said their members had experienced a reduction in expected annual increases, a reduction in current pay, or had been forced to take sabbaticals with no pay in addition to retrenchments and liquidations. A survey from Sanlam’s “Letters to my Pre-Covid-19 Self” campaign found 54% of 1,200 polled South Africans can’t make their money stretch to month end.

Stats SA has reported that 82 out of every 100 South Africans fall outside the medical scheme net, and so are dependent on public healthcare. When big health curveballs come they’re usually incredibly costly. Covid-19 has seen many people seek medical help and even hospitalisation. This has big implications for South Africans’ stress levels.

We are financially stressed, and our overall wellness is suffering. The link between financial stress and mental and physical distress is well known. When we feel stressed the body, through the stress response system, releases hormones such as adrenaline, noradrenaline and cortisol to help us cope. Individuals experiencing chronic stressors have less effective immune functioning due to constant release of these “stress hormones”.

This can lead to high blood sugar levels, tense muscles, headaches, insomnia, fertility problems — and even heart attacks. This vicious cycle can be very tough to break. As medical expenses are a significant stressor for South Africans, affordable medical scheme plans could be one way to curb financial stress and the resulting toll it takes on people’s minds and bodies.

What many overlook is that medical aid is not the only option to gain access to private healthcare. Many employers we work with, whose workforces earn less than R16,000 a month on average, have opted to provide primary healthcare instead. This is essentially the short-term insurance equivalent to health, where a policy outlines in detail what is and is not covered. Claims are then made to recoup medical expenses.

If there is one thing the pandemic has taught us all it is that our health is vulnerable. And that having access to good healthcare can be the difference between tragedy and survival.

This article originally appeared on Business Day