Who is the Special surveyreport about?
Special report
Medical cover options for 2024
Getting the balance right As claims have gone up, most schemes are proposing higher member contributions for 2024 ● Each year, medical schemes announce their contribution increases for the following year, providing members with an opportunity to weigh up the costs vs the benefits and decide whether they want to remain on the same plan, upgrade or downgrade their plans within the scheme. Most schemes allow members to change plans only once a year, on January 1. This year, schemes have proposed increases ranging from 6.9% to as much as 16%, though both the proposed contribution increases and benefits of all schemes are still subject to approval by the Council of Medical Schemes. Medical scheme contribution increases typically exceed consumer price inflation (CPI) by as much as 4%. There are a number of reasons for this, including above-inflation increases in health-care provider costs, a rising burden of disease, increased hospital admission rates, members using their benefits more, expensive new medical technologies and increased instances of fraud, waste and abuse.
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As not-for-profit entities, medical schemes need to ensure that their contribution increases are sufficient to cover the cost of health-care claims for their members in the year ahead. This means that when claims and the cost of healthcare services increase, so does the need to increase contributions. Medical schemes are required by the Medical Schemes Act to have a minimum solvency level of 25% of their gross annualised contributions in reserves. Regulations also require that when a medical scheme increases its contributions, it needs to increase its solvency level by the same proportion. This solvency level is essentially for the protection of members. A failure to maintain the required solvency can have devastating consequences as members of Health Squared Medical Scheme discovered in 2022 when the scheme announced that it would be going into voluntary liquidation, leaving 23,000 beneficiaries without medical aid membership. It later emerged that the scheme had not met its 25% solvency ratio. The Alexforbes Medical Aid Insights report revealed that,
. November 16 - November 22, 2023
over the past 22 years, CPI has averaged 5.5% compared with medical care and health expenses inflation, which has averaged 6.9% a year. Medical scheme contribution inflation has averaged 7.3% in the same period. Most medical schemes offer a variety of plans to suit the different life stages, health
Network plans are an effective and affordable way to maintain the benefit cover you need Anthea Towert, principal consultant at Insight Advisory Solutions
needs and affordability of members. Those plans with higher contributions tend to offer more benefits. More affordable plans typically have more restrictions, including co-payments, which is why it’s important that members understand the rules for each plan. Across the board, most schemes have experienced increased claims in the past year. The proposed contribution increases reflect this trend. Fedhealth announced a weighted average increase across all its plans of 10.8%. Both Mo-
mentum Medical Scheme and Bestmed Medical Scheme announced weighted average increases of 9.6% while Discovery Health announced a 7.5% weighted average increase. Discovery Health has some significant differences in increases, with the Executive plans having a proposed 12.9% increase and the Classic Comprehensive series (excluding Classic Smart Comprehensive) an 11.9% rise. While Discovery’s Saver series options have below-inflation increases, members need to factor in that their medical savings allocations have been cut significantly. Medshield announced a proposed 8.9% average weighted increase, funding a portion of the increases from its reserves, increasing selected benefits by 5% across all plans and decreasing some copayments. Some plans have no increases for 2024. Kevin Aron, principal officer at Medshield, says members can ensure they get the best value for money out of their medical scheme by choosing a plan that is structured to suit their lifestyle and age. Medshield offers an affordable digital plan called MediCurve which is aimed at young, healthy, tech-savvy, first-time