Health insurance

TymeBank and Dis-Chem both enter health insurance market

Two new players, with wide distribution and affordable offerings, are looking to disrupt South Africa’s traditional health insurance market. Traditional medical aids will be looking over their shoulders, especially the big six – Discovery (DHMS), Bonitas, Momentum, Medihelp, Bestmed and Fedhealth – which together hold 89% of the open medical plan market.

These medical insurance offers, which are not strictly comparable to traditional medical aid, mainly target the millions of South Africans who do not have access to medical plans – only 8.9 million have access.

But low-income people who may be getting medical help can now seriously consider their options.

It can also hamper the growth of medical plans, as those without high needs would surely consider this basic coverage instead of even a simple hospitalization plan.

Medical aids (schemes) are governed and approved by the Medical Schemes Act (1998). The Plans are not-for-profit entities, available to everyone (subject to their rules). They belong to their members and aim to generate a surplus to cover future needs (for the benefit of their members). Health or medical insurance is an insurance policy pure and simple.

In practice, the cost of treatment will usually be paid directly to the service provider by a medical scheme (from membership fees). With health insurance, policyholders will receive an amount which they will then use to pay health-related bills. This may or may not cover all of their incurred costs.

Membership of medical aid in South Africa has been stagnant for some time, with membership actually declining by 2% in 2020.

Read: Discovery isn’t the only medical plan losing limbs

According to Dis-Chem, 11.8% of South Africans pay for private health care, 2% are covered by medical insurance and 72% have access to the public health network.

Tauriq Keraan, CEO of TymeBank says: “The terrible reality is that only one in seven South Africans [has] access to medical help, and most people cannot afford private health care. ”

Difference

The first entry, announced Wednesday, is Dis-Chem Health, which seeks to fill a gap in what the group calls “affordable, quality private health care in an environment where more people are willing to pay for health care.” health”. Entry into this adjacent market for the pharmacy group follows last year’s R195 million purchase of 25% of Kaelo Holdings, which houses a complementary portfolio of healthcare assets, including health clinics. occupational health, the AskNelson psychological wellness platform, and the rich benefits administration. gap and primary health insurance products”.

This was followed a day later by TymeBank, which unveiled TymeHealth. In partnership with National HealthCare Group, it also aims to bring “quality and affordable medical insurance to consumers”.

TymeHealth is an app-based offering that provides medical insurance from R139 per month.

Dr. Reinder Nauta, executive chairman of the National HealthCare Group, which provides products to low-income and emerging market segments, says TymeHealth has “unlocked tremendous potential in what was previously uncharted territory.”

Read:

To apply for TymeHealth, one must be a TymeBank customer (accounts have no monthly fees). The health plan choice is made in the TymeBank app and once successful, membership is activated. Members will be able to access over 12,000 registered healthcare providers, including GPs, pharmacies, dentists, optometrists, specialists and hospitals that are part of the National HealthCare Group provider network.

Choice

Currently, there are three TymeHealth plans to choose from:

  • MediClub Connect (R139 per person per month),
  • MediClub Premier (R299 per person per month), and
  • MediClub Elite (R399 per person per month).

Plan details are available here.

At the basic level, medical advice is provided by trained nurses and general practitioners via WhatsApp. At the higher end, these are in person through the network. There are waiting times for coverage, some of which are quite long.

Dis-Chem Health’s current projects are:

  • The Core plan (R431 per month), and
  • The Plus plan (R591 per month).

Additional coverage options are available for accident, medical emergency and gap coverage.

“Not a medical diet”

In its policy coverage documents, Dis-Chem clearly states, “This is not a medical plan and the coverage is not the same as a medical plan. This policy does not replace membership in the medical plan. ”

By the end of September, Kaelo had 381,000 “lives under management” across the gap, primary health insurance and employee wellness coverage. During its interim results, Dis-Chem said the retail market offering would target “12.4 million employees [but] uninsured people” in the country.

He claims that this offering “advantageously positions Dis-Chem in the delivery of care in a rapidly changing primary healthcare landscape and enables vertical integration into the healthcare value chain.”

It considers its 430 in-store clinics spread across more than 250 stores to be “well positioned as a bridge between the public and private healthcare sectors, both from a cost and accessibility perspective”. He adds that these clinics have seen an increased demand for primary health care services, indicating the role of pharmacy in this space.

Read:

Dis-Chem Group Chief Financial Officer Rui Morais says: “The stagnation in the number of medical aid members has been driven by a consumer increasingly constrained by rising private medical costs, well above inflation rate steadily over the past two decades. This has led to more people downgrading to cheaper medical aid plans or canceling their medical coverage.

“There is a growing demand for medical insurance policies that offer a wide range of everyday health care benefits.”

There are market rumors that Standard Bank and Liberty may seek to enter this space using its Liberty Health platform – it currently offers health insurance coverage in 26 markets across the continent (excluding SA) .

It is also likely that FNB, which has aggressively entered the life and short-term insurance markets, will soon be competing in this segment.