The countrywide lockdown as a result of the coronavirus means that millions of us are facing the prospect of reduced or no income in the months ahead. 

You may run into difficulty and default on your contributions especially if you lose your job or you are put on short-time. You may also be tempted to stop your contributions to save some money as it is for many households their biggest expense. 

But defaulting or choosing not to pay your contributions means you will lose your private doctor and hospital cover at a time when there is a high risk of falling ill. Your medical scheme is obliged to cover all the costs of your diagnosis, treatment and care if you contract the coronavirus.

Damian McHugh, executive head of marketing and distribution at Momentum Health, says, “In a health crisis the last thing you should think about stopping is health care. All we are achieving with the lockdown is flattening the curve. It does not mean once the lock down is over the virus will be gone. I would not recommend lapsing health cover at this point.”

The country’s largest scheme Discovery Health Medical Scheme will suspend your benefits if you are just three days in arrears, and will terminate your membership if you are 14 days in arrears.

The Council for Medical Schemes has asked schemes to look into cases where members default, but medical schemes and consultants say they have no room to give you payment holidays. 

Zee Gumede, senior healthcare consultant at leading wealth and financial advisory firm, GTC, says schemes are only allowed to operate within the confines of their specific rules and many medical scheme staff members are working from home which makes administering some grace for paying contributions difficult.

Gumede says if schemes allow a ‘premium holiday’, but do not later recover that contribution, while they continue to pay claims, the scheme will have a deficit which will in turn need to be covered by premiums – possibly much higher premiums next year, she says. 

McHugh says allowing members more time to pay off contributions introduces more financial risk at a time when investment markets have performed poorly negatively, affecting scheme reserves. 

He says Momentum Health Solutions offers members a HealthSaver facility, which is legally registered outside of the Medical Schemes Act. 

If you have saved in this facility you can use the money to pay for medical expenses not covered by your scheme or to pay your medical scheme contributions if you are facing financial uncertainty, he says. 

Lee Callakoppen, principal officer of Bonitas, says if you are facing financial difficulties you should make a submission to the fund and the scheme may relax prevailing provisions relating to contributions, but the law does not allow you to suspend contributions and cover for a period.

The scheme is lobbying the regulator to amend regulations to allow such relief, he says.

What are your options?

NT Snyman, senior consultant at Alexander Forbes Health, says there are three options available to you if you want to save money on your contributions and you should only when all else fails cancel your membership:

1. Buying down

Some schemes do allow you to buy down to a lower option during the year. “This allows you to reduce your monthly contributions without giving up their membership,” he says. Schemes may apply terms and conditions when you move to a lower option, so check before you request a downgrade.  

You could downgrade: 

• From a comprehensive to a saver plan - your above threshold benefits will fall away and the savings account will be much smaller. 
• From a saver plan to a hospital plan – If you do this, any savings which you used since January will need to be repaid to your scheme.
• From a hospital only plan to an entry- level plan – this will introduce limits on benefits and networks. 

2. Reducing the number of dependants

You will have to make a hard call on which family members to remove and you may regret this should the one/s you remove fall ill. 

3. Shop around for better rates

Rita Cool, certified financial planner at Alexander Forbes, says you should have extra time during the lockdown to shop around for better contribution rates. It is quite difficult to compare options so you may need an online consultation with a financial adviser.

Cancelling your membership

This should be your last resort. If you do cancel your medical scheme membership, try to rejoin or join a new scheme within three months. If you do not, your new scheme can impose: 

• A three months’ general waiting period (no benefits for the first three months).
• A 12 months’ exclusion from cover for any existing medical condition (the scheme will not cover any medical expenses related to the existing medical condition for the first year of membership).
• Late joiner penalties on you or your dependants over 35 years of age.