Young risk profile likely to help cushion Momentum Health scheme from Covid-19 impact

The Covid-19 pandemic has resulted in doctors and hospitals seeing fewer patients (PHOTO: Morsa Images/Getty Images)
The Covid-19 pandemic has resulted in doctors and hospitals seeing fewer patients (PHOTO: Morsa Images/Getty Images)
Morsa Images
  • Momentum's average beneficiary age is 33, resulting in fewer Covid-19 claims from members.
  • South Africa's Covid-19 cases topped 400 000 this week and medical schemes expect a rise in claims related to the pandemic.
  • Covid-19 is likely to have an impact on premiums for 2021 but just how is unclear.

Momentum Health's young risk profile puts it in a better position to withstand the effects of Covid-19 but its competitors may see an increase in claims related to the pandemic as the number of South Africa's Covid-19 cases increases.

Doctors and hospitals have been seeing fewer patients in the past few months as people put elective surgeries on hold out of fear of contracting Covid-19, leading to fewer claims from medical aids.

Initially, at the start of the outbreak, many claims came from panic buying as people rushed to pharmacies to stock up on over the counter medicine.

But this has stopped.

"Financially, at the moment, Covid-19 has a positive impact but that's only because we've seen some lockdown effect on people accessing benefits," Momentum Health head of sales and marketing Damian McHugh said late last week.

During the Level 5 lockdown, visits to doctors and hospital admissions were down by 50% per thousand, although the number is picking up and is expected to increase on the back of pent-up demand. 

However, McHugh said he expected the Covid-19 impact to readdress itself as more people catch the virus, which means that medical schemes will start seeing an increase in claims related to the pandemic.

South Africa has seen a sharp rise in Covid-19 cases, with the number shooting past the 400 000 mark this week.

For Momentum Health though, the rising claims should not have too much of an effect, given the scheme's risk profile.

According to research by Momentum Health, it has the youngest members, with an average age of 33, followed closely by its competitors, Bonitas and Discovery, with an average age of 35.

Fedhealth has the oldest beneficiaries with an average age of 43 followed by Bestmed and Medshield at 37.

"At the moment, we are probably on the better side of that. We are hoping it remains but we are cautiously concerned about where it might end up. So it's a good place but not necessarily one that we are going to bank the money on now," he said.

Although the younger profile of its members is likely to cushion it against a flood of claims when pent-up demand for elective procedures is released, Momentum Health still has to deal with claims from other types of surgeries that are not based on an older risk profile, such as childbirth. 

For medical schemes that have already been battling for growth in a tough economy for a number of years, the effects of Covid-19 go beyond life returning to normal and how they will set prices for 2021. 

"How does a group of actuaries actually analyse what the claims cost is going to look like this year, based on this previous years' worth of claims costs, when the one that they've just gone through is something that they have never seen before?" asked McHugh.

He said the new normal was going to be difficult to predict and questioned whether the future would see a drop in doctor consultations and how claims would be impacted by pent-up demand.

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