Defending members’ medical savings
“I have always maintained that you can tell a lot about a medical scheme
from how it treats members’ medical savings.” – Josua Joubert
Let me explain why I say this…
As you will remember in 2017, a Constitutional Court ruling changed the way medical schemes report on members’ Personal Medical Savings Accounts (PMSAs). Instead of being recorded as liabilities in scheme financials, these are now regarded as assets. Nevertheless, members remain in control of how their portion of such funds could be used to cover their healthcare claims — well, in theory at least.
In practice, however, members of most medical schemes will find that some of their most common healthcare needs are frequently paid from the medical savings portion of their benefit structure, rather than from their scheme’s risk pool.
While allocated benefits are replenished each year and form part of the cumulative risk pool of the scheme, members’ PMSAs can accumulate for use in the following year or be saved indefinitely for ‘a rainy day’.
However, when schemes opt to pay more benefits out of member’s medical savings instead of the common risk pool, member savings are quickly depleted – thereby largely frustrating members’ saving efforts.
This approach signifies that such schemes regard members’ medical savings as scheme assets in a broader sense rather than simply a shift in how these funds are reported on from one side of the balance sheet to the other. In such schemes, savings become little more than a mirage, often evaporating entirely before a member reaches a stage where they may really need access to such funds.
While brokers are familiar with this increasingly ubiquitous claims payment structure, many members – particularly those who are new to private healthcare cover and may not read all the fine print – take for granted that many of these types of claims will be paid from risk rather than savings.
At CompCare, however, we look for ways to preserve member medical savings through funding important wellness and preventative benefits, as well as oncology and speciality care, from our pooled scheme resources rather than tapping into members’ PMSAs.
For example, CompCare was one of the first schemes to fund the HPV vaccine for the prevention of cervical cancer from risk rather than member savings.
Our philosophy is to support and enhance members’ wellness so they can live healthier, active lives. Penalising members for taking responsible care of themselves by taking funds from their medical savings accounts simply does not make sense, which is why all our benefit options – including our entry-level hospital plan – pay more benefits from our risk pool instead, yielding substantially more value for our members.
CompCare members are therefore in a position to enjoy more accumulated savings, and choice over how their PMSA funds are utilised, enabling them to save for those healthcare extras they may one day need. Few other open medical schemes can vouch for protecting member medical savings while at the same time sustaining healthy financial reserves.
The health of our members is their greatest asset, and we consider our members to be our greatest asset. Financial reporting aside, we still very much regard members’ savings as theirs, rather than the scheme’s, which should be protected and preserved as far as possible.