FIFI PETERS: Medical insurance group Momentum has opted to hold off increasing the contributions its members make to its various schemes until September 2022. Only then will higher pricing start to kick in.
We discuss this further, and also the general trends that we are seeing in terms of Covid-19 with Damian McHugh, the executive at Momentum Health Solutions. Damian, thanks for joining the show. You’re providing your members with further relief – a welcome development I imagine. Just tell us exactly how much this will cost you.
DAMIAN McHUGH: Sure. Good evening, Fifi, and good evening to your listeners. A medical scheme ultimately belongs to its members and the board of trustees has to sit and think about how we remain relevant and, as in your previous discussion, talk about how our economy has been under pressure in various areas. I think the consumers probably more than ever have been under pressure financially over the last 18 months or so.
Funnily enough, even though it was a healthcare crisis – and it still is a healthcare pandemic – medical schemes over this period have probably made more money than anyone would have anticipated. That’s largely because people hadn’t been utilising healthcare services during the lockdown. So medical schemes ultimately were collecting too much money in premiums and paying out fewer claims than they normally would have. As a result of that, we were looking at ways to see how we could, if you like, provide a deferment or a value back to the consumers who have been part of the ones who have contributed more, and at the same time be socially relevant in being able to provide back. The deferment is probably costing over R200 million to try and provide that assistance back to back to members.
FIFI PETERS: And why have you marked September 2022 as the period when the relief will end?
DAMIAN McHUGH: We wanted to try and make sure that the increase over the whole year is not something that significant. We wanted to make sure, firstly, that the medical inflation in the premiums was correct. That’s why we decided to do it at 6%, and do it from September. The reason why we delayed till September is because that makes the effective increase 2%, which we think over a year is very manageable for consumers to be able to budget and work through.
Also, the later we do it, hopefully the more the economy will bounce back, the more the vaccine implementation and rollout gets done; maybe jobs will be back and consumers will be able to be able to deal with an increase later. The earlier you do it, it’s harder, because the economy hasn’t bounced back yet. So those are the two main reasons.
FIFI PETERS: When 2020 ended I think we all thought that we had seen the back of Covid-19, until we arrived in 2021 and were confronted with the various mutations of the virus. In the unfortunate scenario in which perhaps 2022 is also a rollercoaster ride of a year in terms of the new variants that may emerge, will you perhaps look at assessing the end or the termination of the relief, or is it set in stone that you can only provide relief up until September 2022?
DAMIAN McHUGH: At the moment we want to bring certainty to the consumer and to the advice community which is helping consumers make their choices for the 2022 year. So, with the information we currently have we would probably say it will be set like that. And if, let’s say, there are more lockdowns – let’s hope not, please, I don’t think our economy or any of us want to go through any more of those – if that had to happen, let’s say we had another year where healthcare costs were saved massively for medical schemes, we could then provide a deferment in the following year, even longer, or a greater amount of deferment.
I think there are a lot of unknowns. Like you say, there could be new variants, there could be all sorts of things, there could be the cost of Covid, not enough vaccine rollout happening and people not taking the vaccine; and if the cost of the treatment that we have to provide remains significantly higher, then those unknowns that schemes have to plan for into the future could potentially impact the scheme negatively.
For now I think it’s kind of set in stone with the information that we have; but these are unusual times, and so we have to adapt to them. I don’t think we’ve had schemes in the last 20 years changing increase periods from January 1. It’s been kind of the most consistent thing in the world, like death and taxes, with medical schemes increasing January 1.
I think we’ve seen new ways of trying to help consumers, new ways of innovating, and we want to be right at the cutting edge of being able to help consumers through difficult times.
FIFI PETERS: Today we heard news from the National Institute of Communicable Diseases that South Africa had officially exited its third wave of Coronavirus infections. Does your data tally with that announcement?
DAMIAN McHUGH: Yes, it does. We’ve seen the number of infections and obviously as a result of that the number of claims across all the medical schemes administered being less than it has been in times past. I just want to warn consumers that just because we are out of the third wave doesn’t mean we [don’t] need to be vigilant around wearing face masks, getting vaccinated. Those things are still so, so important as we hope for our economy to open up even more – particularly for us, as we’re going into our summer months now in South Africa.
We want to experience sport, we want to experience concerts, we want to experience all of those things we would be miss. In order to do that we’ve got to still make sure we do the wise things so we don’t start 2022 with a fourth wave. We really don’t. If we are going to, let’s make sure that the impact of that fourth wave is significantly lower than waves one, two and three. So yes, please, please, please let’s not stop being vigilant.
FIFI PETERS: And of course, what a lot of these scientists and the experts are saying is to minimise the impacts of further waves we need to maximise vaccinations. So what are the vaccination rates looking like across your various sites?
DAMIAN McHUGH: We have five spots across the country, Fifi, and unfortunately we wish more people were coming. They particularly in the afternoons are not as busy as they have been in the past, and therefore we have capacity – and you’ll probably find it’s true right across almost all the sites in the country. There is enough vaccine, and there’s enough people to be able to provide the vaccine; what we are missing are the people to get the vaccine. And so it really is something that I’m sure people are hesitant about. I understand that, because we don’t always have all the information.
But for those of us who are closely connected, we can tell you that people who are up in ICU at the moment, people who are dying – 99.9% of those people are generally people that haven’t been vaccinated. The vaccine provides great safety and great security to you and your community around you. I think that’s the other important thing. You are not just doing it for yourself, you are doing it for your community around you.
So encourage people in your family or people in the community around you to have the vaccine. It really, really does help. And it will help all of us get back into to some normality in our lives.
FIFI PETERS: But, as Momentum, how are you trying to address the challenge of vaccine hesitancy?
DAMIAN McHUGH: We’ve actually done that quite a number of campaigns, Fifi, right across different radio stations, different incentives. In fact, in our launch today, around our changes around our health-insurance products, we’ve actually built some incentives into the model which encourage people. In addition we have a rewards programme called ‘health returns’ where you should do some activity and you’ll have a healthier heart – we call it a ‘healthy heart score’.
We provide you with money back every month that you can put into your medical scheme savings account and use it for claims. It’s almost free money, and we are enhancing that free money this year by giving you additional money if you’ve had the vaccine. So we are trying to encourage people to do the right thing by providing incentives, the old stick-and-carrot. We are using the carrot approach to try and help people understand the value of doing it.
So, yeah, lots of campaigns, education campaigns. We’ve been doing video series for our clients, for them to see and understand [discussions] from medical specialists, epidemiologists, running webinars at clients. Even companies that aren’t our clients – we’ve been trying to get out to them to try and help them understand the value and the power of being vaccinated and try and allay some of the myths that we all hear.
FIFI PETERS: Well I hear you, 100%. You’re spreading the word, but I think that your members who do listen to the Market Update will certainly find relief in the relief you have granted by way of not increasing medical contributions at a time where the economy is still in a very precarious position.
But Damien, thanks so much for your time. We’ll leave it there. Damien McHugh is the executive at Momentum Health Solutions.