Sharp increase in cancer-related gap cover claims

An analysis of ‘Initial Cancer Diagnosis’ and ‘Cancer Co-payment’ gap claims paid by Sirago Underwriting Managers over 24 months from 2021 and 2022 shows that the volume of claims increased by 281% combined, compared with the same period in 2019-2020.

Sirago Underwriting Managers is a gap cover provider underwritten by GENRIC Insurance Company Limited.

Specifically drilling down into each gap claim category:

• ‘Initial Cancer Diagnosis’ claims volume increased by 631% in 2021/22 compared with 2019/20. As part of the benefit package on certain options, Sirago’s ‘Initial Cancer Diagnosis’ benefit provides a lump sum payment upon the initial diagnosis of a malignant cancer. This benefit is intended to be used to fund the costs of diagnostic investigations such as PET scans, MRIs, biopsies, and blood tests which medical schemes may impose co-payments or sub-limits on, as well as immediate access to medication requirements while members are still registering their treatment plans with their medical schemes. This could cost members thousands of unbudgeted Rands upfront.
• ‘Cancer co-pay’ claims volumes increased by 201%. Sirago’s co-pay benefit is applied once the medical scheme cancer benefit sublimit has been reached within the benefit cycle and a co-payment is imposed. This gap cover benefit incorporates co-payments for ongoing cancer-related treatments and biological drugs until the next full treatment cycle is reinstated by the medical scheme.

Martin Rimmer, CEO of Sirago, says that the sharp increase in cancer-related gap claims is profoundly concerning on two fronts:

• Firstly, it shows just how massively prevalent cancer is in our society and lifestyles, especially when you consider that the dramatic increase of 601% relates only to first-time diagnosis of malignant cancer in the last two years. Anecdotally, Sirago points to the aftermath of the impact that the pandemic had on preventative healthcare when the early diagnoses of chronic diseases, like cancer, simply collapsed. Preventative, annual health checks by South Africans took a long time to recover and in fact are still not at pre-pandemic levels as expected – Rimmer adds that affordability and the commensurate buy-down in medical scheme benefits by consumers play a big role on this front.
• The Cancer co-payment claims relate specifically to the shortfalls that medical scheme members are facing for in-hospital cancer treatment once their limits are reached on their medical scheme options for the applicable cycle and that they would need to fund out of their own pockets if they did not have gap cover in place as a supplementary cover to their medical scheme benefit.

“These trends are worrying in the sense that many of these cancer diagnoses are likely to be at much later stages of detection and this has a profound impact for patients in terms of the success and cost of their treatment. The sharp increase in co-payment claims is also firmly rooted in the affordability challenges that South Africans are facing in the current economic climate. Many consumers have been forced to buy down on their medical scheme benefits to ‘core-plans’, which in turn means access to potentially lower benefits and thus exposure to possibly more self-funding of their healthcare treatment to come from their own pockets,” explains Rimmer.

“Ostensibly, this implies that preventative health checks, like those for cancer and other chronic illnesses, would need to be self-funded by members from their own pockets if they are on core/ hospital plans which do not offer these benefits, and are possibly likely to be delayed until the symptoms can no longer be ignored. A late diagnosis could ultimately mean more complex health interventions with more invasive, aggressive, costly, and lengthy treatment and recovery time. We’re seeing the evidence of this with a sharp uptick in ‘mega’ gap claims related to cancer – these are internally classified as claims of R50k and above for shortfalls or co-payments not paid by medical schemes,” explains Rimmer.

Surviving the financial challenges

There are significant challenges in getting people back to their preventative and screening healthcare regimens, not least of which is affordability. As mentioned, many people are facing worsening financial hardship and are having to downgrade their medical scheme options to ‘core hospital’ plans. This means a commensurate reduction in benefits, including for preventative care, health screenings and possibly even reduced cover for cancer treatment.

“All medical schemes typically cover the cost of Prescribed Minimum Benefits (PMBs) cancer treatments at cost, but this doesn’t automatically mean that ALL diagnosed cancers are necessarily a PMB. Each scheme has their own rules and protocols diagnosing and managing PMBs and if the cancer detected does not form part of the PMB basket, members will most certainly be exposed to some out-of-pocket expenses during their treatment. Certain medical schemes might also only fund certain treatments partially like biologicals, if at all.

Many core plans also do not fund any of the diagnostic tests such as MRI and PET scans either. If you’re not able to upgrade your medical scheme option to get the appropriate cover – either due to affordability or because the medical scheme has a waiting period on upgrades – you could be forced to sacrifice your life savings or future financial security to gain access to the treatment needed,” explains Rimmer.

It’s crucial to meet with your independent financial planner or intermediary and make sure that your healthcare funding plan such as medical scheme options and gap insurance work hand-in-glove to provide you with access to the best quality healthcare and treatment that you can afford, to mitigate as far as possible the need to delve into your monthly disposable income or life savings.

“As financial constraints become ever tighter, the importance of building a resilient healthcare plan that you can rely on during a health crisis has never been more critical,” concludes Martin.

For more information go to www.sirago.co.za