DMYTRO SHEREMETA
Medical schemes have released their rates for next year, and their increases are ahead of inflation. While it may not seem that way to the consumer, medical schemes are locked in a delicate balancing act to maintain a tolerable level of increase and keep private healthcare affordable, says Tony Singleton, chief executive of Turnberry Management Risk Solutions.

Medical inflation is between 10.5 and 12.5 percent, and yet the average increase in contributions from the “big three” medical schemes, Discovery, Momentum and Bonitas, for 2020 is well below this, says Singleton. However, this “belt tightening” comes with reduced cover and more obstacles to overcome.

Singleton says that medical inflation is defined as the observed increase in member claims from a medical scheme over the previous year. There are a few reasons for this increase, not least of which is the fact that healthcare services are becoming more expensive. More hospitals means more availability of hospital care, but it also means that more people are likely to seek treatment in hospital instead of alternative options, increasing costs, says Singleton. In addition, advances in medical treatments and technologies come with an increased price tag.

Adding to this, medical scheme members are using more healthcare services, says Singleton. Claims continue to increase, creating pressure on contribution increases. Populations are ageing, thanks to modern medicine helping us to live longer, and this means that medical scheme members are older and are more likely to require treatment and medication, he says.

Medical inflation is appreciably higher than the increases that medical schemes have implemented for next year. It is extremely difficult, in light of this, for medical schemes to provide the same level of services, says Singleton.

To combat the price increases, medical schemes have introduced lower-cost options that have strict networks of providers that may be used. Co-payments have been increased or added, says Singleton.

Additional services are subject to sub-limits, which means that the medical scheme will pay for them but only up to a defined rand limit. Medical schemes are also trying to encourage members to make use of lower-cost healthcare options such as consultations with nurses prior to GP visits or video calls instead of face-to-face consultations and day clinics for minor procedures, says Singleton.

There is also significant effort being expended in reducing medical fraud from all sides.

While medical schemes are maintaining and, in certain instances, increasing their annual limits, medical inflation continues to rise, necessitating strict risk management. This means that medical scheme members are increasingly likely to incur out-of-pocket medical expense shortfalls.

In the event of a medical emergency, it is increasingly likely that consumers will be left with out-of-pocket medical expense shortfalls that they will be liable to cover. Gap cover is an economical solution to assist in covering these medical expense shortfalls. Discuss your needs with your financial adviser, to find a solution that matches both your medical needs and your financial limitations. 

PERSONAL FINANCE