Medical Scheme Membership Fees In 2017

Members of Medical Aid Schemes in South Africa have experienced significant increases in their contributions for 2017. In most cases, these are in the Double digits. Here we will have a look at medical scheme membership fees in 2017.

Discovery Health has a weighted increase of 10.2% Momentum Health weighted at 11%. Most other Medical Aids have at least a 10 % increase.

Dr Jonathan Broomberg (CEO Discovery Health) Discovery Health expects medical inflation costs for 2017 to be between 10 – 15% and in some cases as high as 20%.

Victor Crouser (Coastal Head of Health at Alexander Forbes) has mentioned that members can expect during 2017 to see Medical Aids trying to balance income with expenditure. However, the worry is that this will result in reduced member’s benefits.

Discovery Health and GEMS (Government Employees Medical Aid) both announced that they had experienced a sharp increase in claims during 2016.

Reasons Increase in Claims – Medical Scheme Membership Fees

  • Medical Scheme Membership FeesIncreased Hospital Admissions
  • Increasing use of benefits by members
  • Fraud
  • Wastage
  • Abuse by some members who only join when they are sick.

 

 

Medical Schemes have a responsibility to manage options to make sure that they are self-sustaining.

Ways for Schemes to Remain Solvent – Medical Scheme Membership Fees

  1. Increase Contributions
  2. Cut benefits
  3. Run down their reserves. By law, they have to retain in reserve at least 25% of members contributions.

Crouser states that both Discovery Health and GEMS are strong schemes and have the required reserves. In addition, their average membership age is low.

However, both these schemes have applied percentage premium increases in double digits.

The Council of Medical Schemes allows as a guideline, an increase of inflation plus 3 %. It would have been in the region of 8.9 %. The Medical schemes are only allowed increases above this if they can show good reasons why it is needed.

Schemes which have declining number of members and increased average age of members will need to have put in place higher percentage increases to remain solvent.

Premiums

Members must pay attention to a possible reduction in benefits along with increases in premium.

Eight out of ten Discovery Health members will have experienced increases in premiums in 2017 of 9.9 %. However, for example on the Coastal Saver Plan, the amount of amount of contributions allocated to savings has been reduced to 20% from 25%.  It will mean less money available for day to day benefits. Discovery Health has done this so that the premium contribution will remain affordable.

Marketing manager for Momentum Health, Damian McHugh, has advised that Momentum increase is between 8.9% and 15 %. They further state that the benefits will increase with medical inflation. Momentum has a low average age ration of 42 years which has helped in managing costs.

Schemes which have a higher average age of membership, experience higher number of claims and accordingly a decrease in their solvency ratio.

 

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