File image

Cape Town - The Council for Medical Schemes (CMS) on Wednesday reported that South Africa’s 83 registered medical schemes, both open and closed, had been found to be in a healthy financial state.

The CMS, which regulates medical schemes operating in the country, said that according to its findings, all the registered medical schemes were able to “continue to provide sufficient financing for private medical care”.

The 83 registered medical schemes as of December 31, 2014, included 23 open schemes and 60 restricted schemes.

These schemes had a combined total of 8,81 million members in December 2014, comprising of 3.9 million main members and 4.9 million dependants.

In addition, the regulating body said the schemes were “nowhere close to collapsing,” as was reported recently in the media. However, costs associated with private healthcare were climbing.

Daniel Lehutjo, CMS acting CEO and registrar said that “medical schemes are not for profit entities and all contributions collected are meant to provide for the benefits provided to members including allowance for reserving and paying of non-healthcare costs of administering a scheme. As contributions increase each year, the ratio of claims paid over the years has been consistent between the range of 86.5 percent and 88.2 percent”.

This meant that the schemes “are sustainable and are managing to pay the claims by its members as required”.

Solvency was an integral aspect of a medical scheme’s ability to pay claims. The CMS revealed, according to its latest annual report, released last month, the solvency ratio across the industry remained stable. Between 2013 and 2014, there was a solvency ratio of 33.3 percent. Open schemes’ solvency ratios increased by one percentage point to 30 percent in 2014, whereas restricted schemes experienced a decrease of 0.8 percent, falling from 38.2 percent in 2013 to 37.9 percent.

Lehutjo said that drivers increasing healthcare costs included “the growing burden of chronic disease care; high prices charged by service providers; less young and healthy people joining medical schemes to subsidise the old and sick; and people also claim more”.

He noted schemes’ biggest expenses were hospitals and specialists. Statistics showed medical schemes spent 11.1 percent more on healthcare benefits in 2014 than in 2013, and all payments schemes made to specialists amounted up to R29.1 billion, or 23.5 percent of the total amount of healthcare benefits paid in 2014.

AFRICAN NEWS AGENCY