Fedhealth and Sanlam join forces to give medical aid a much-needed reboot
Why a medical aid 'reboot ' is long overdue
As of 2023, only 15.7% of South Africans — about 9.8-million people — belong to a medical aid scheme. For many South Africans, monthly medical aid contributions are simply unaffordable, particularly given the current economic climate of rising inflation and unemployment.
For some South Africans, medical insurance is a cheaper alternative that's gaining in popularity, but it typically falls short in covering the full costs of a medical procedure. Instead, a medical insurance policy allocates a set monetary limit for a list of specified benefits and things like basic medication, GP and specialist consultations. More often than not, this monetary payout isn't enough to cover the costs associated with getting private medical care including hospital admissions.
It's clear, then, that there's an opportunity for a medical aid plan that provides customised and relevant benefits while still being affordable. Fedhealth and Sanlam have recognised the need for an updated offering in the market, and are partnering to create a groundbreaking medical aid solution designed to make quality healthcare more accessible to the average South African.
New era for South African medical aid
So how is providing quality medical aid cover possible at an affordable price? The answer lies in customisation. Currently, most South African medical aid schemes, while offering various plan options, don't allow people to truly tailor their cover to their specific needs. For example, someone who is young and healthy may not need the majority of value-added benefits that a particular plan offers — yet they're forced to pay for them.
Then there's the fact that a medical aid member's needs inevitably change over time. In the current medical aid landscape, a member would typically need to wait until a certain time of year to move onto a new plan, rather than being able to change the benefits, coverage and day-to-day savings on the plan they're currently on. If medical aid were truly customisable in this way it would be cheaper, as a member would only pay for what they really need. And, the healthier they are, the lower this cost would be. 'It's this relationship between affordability and customisation that the new scheme aims to address,' says Jeremy Yatt, Fedhealth's principal officer.
Beyond affordability, the new scheme also aims to solve other common frustrations with medical aid. One of these is the complexity of medical aid products, which makes them difficult for the average person to understand. 'For many consumers, their medical aid plan has become so complicated that it's hard for them to know what they're really getting, or what they're actually paying for,' says Yatt. 'We want to take the element of surprise out of medical aid so that it's clear, honest, and actually makes sense to consumers.'
There's a gap in the market for a medical aid scheme with no vague rules, no surprises, and no disappearing benefits
Jeremy Yatt, Fedhealth's principal officer
Many consumers also tend to have a lack of trust with their medical aid scheme, whether it's the perceived value they're getting, or uncertainty about whether they'll get the coverage they need in a medical emergency. 'As a medical aid member, members want to know exactly what they're covered for, and that they'll be covered when they need it,' says Yatt. 'Given this, there's a gap in the market for a medical aid scheme with no vague rules, no surprises, and no disappearing benefits.'
The partnership between Fedhealth, a trusted name since 1936, and Sanlam, one of SA's most established financial institutions, creates a synergy of strengths when it comes to medical cover and insurance. This translates as an opportunity to add real value to consumers by offering insurance and medical aid products from one provider, which can mean more simplicity and lower costs. This could mean adding on a medical insurance policy to a hospital plan for day-to-day medical expenses, or a gap cover policy to cover shortfalls that a hospital plan may not cover.
In a joint statement announcing the sole partnership with Fedhealth this month, Kanyisa Mkhize, chief executive of Sanlam Corporate, and Gerald van Wyk, Group CEO of AfroCentric — a diversified healthcare company in which Sanlam owns a controlling share — said: 'This move supports the group's strategy to provide a complete health offering to existing and potential clients as part of its overall financial services value proposition. The partnership with Fedhealth supports Sanlam's ambition to provide integrated healthcare, insurance and investment offerings to new and existing clients.'
With South Africans under mounting financial pressure, this new scheme comes at a crucial time. It's more than just a new offering — it's a complete shift in how medical aid is delivered. 'Sanlam and Fedhealth are proud to be leading the way in creating a new scheme that truly meets the needs of the modern consumer without compromising on quality,' says Yatt. 'By building it from the ground up, we're giving South Africans the medical aid cover they demand and deserve.'
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