Compare medical schemes for best value

By Supplied Time of article published Sep 26, 2018

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JOHANNESBURG - When it comes to medical schemes, affordability is usually the biggest consideration. However, monthly premiums should be weighed against the actual benefits and healthcare cover offered, to make an informed decision.

Consumers, unable to make rands or sense of the many plans available and what they’re actually offering, are often tempted to migrate to what is perceived as a more affordable plan, but with less coverage.

“Comparing the average percentage increase in isolation is not an indicator of the value of the healthcare being provided,” said Gerhard Van Emmenis, principal officer of Bonitas Medical Fund. “We urge consumers to compare monthly contributions with the benefits to ensure they are getting the cover they need,” he said.

He maintains that simply comparing the average percentage increase announced by the various schemes is not a litmus test for value for money, since it does not take into account the basis on which the increase applies.

Here is a simple maths example: Two schemes offer the same benefits, however, Scheme A costs R1000 per month, while Scheme B costs R1100pm. If Scheme A announces a 10percent increase (R1100pm) and Scheme B announces a 7percent increase (R1177) but neither change or increase the benefits, then Scheme A is still providing the same benefits, at a lower cost, even though it announced a higher contribution increase.

“That’s why it’s important to compare the actual benefits and contributions rather than only looking at the percentage increase,” says Van Emmenis. This is where a broker can be invaluable in assisting members with claims.

Van Emmenis explained that schemes with a growing membership base would require additional loadings in the monthly contributions to increase the reserves in order to meet the statutory solvency requirement of 25percent.

“This is a legislative requirement and does not imply the scheme is performing poorly - in fact the opposite is true in this context,” he said.

According to data released by the Council for Medical Schemes (CMS), the market has not been successful in attracting young, healthy people who are less prone to chronic health conditions like diabetes or hypertension: lifestyle diseases that adversely effect the pool of contributions.

The increasing age of beneficiaries is also a huge concern. The CMS reported that the industry average beneficiary age increased from 31.9years in 2013 to 32.5 years in 2016. The pensioner ratio increased slightly to 7.9percent, with a general rise in the ratio for both males and females.

Schemes with an ageing membership base generally experience increased claims costs, in excess of inflation, due to the higher use of benefits. “We have seen around a 2percent increase in claims by members annually as they age,” said Van Emmenis.


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