“The medical trend rate in South Africa for 2020 is expected to be slightly lower than the previous year. However, the medical trend rate levels in both nominal terms and real terms continue to be extremely high, and we do not expect to see a different path any time soon,” says Gavin Griffin, Aon’s executive head for employee benefits.
“The increase in VAT has already been fully assimilated by the market, and we will continue to see carriers working to contain costs by extending network arrangements to direct utilisation to more managed care interventions.
“The supply-and-demand side elements of utilisation have increased due to the ageing population of medical schemes, as well as the increased incidence of chronic disease. Therefore, increased utilisation remains the major cost driver.
“A medical scheme with an ageing member base is expected to have a 2 to 3 percent increase in claims for every year that the average age increases.