D-day looms for medical scheme swaps

Medical scheme beneficiaries have until November 30 to change their options by either swapping, buying up or down in their schemes. Beneficiaries can only change their benefits options once a year.

Beneficiaries are faced with above-inflation increases in their yearly subscriptions. Several schemes have already announced yearly increases for 2019.

According to Statstics SA, the consumer price index (CPI) for October stood at 5.1% while healthcare inflation is even higher, at an estimated 5.4%. The figures were announced yesterday.

Medical schemes typically add 3% to CPI as part of the process to determine their yearly contribution increases.

Charlton Murove, head of research at the Board of Healthcare Funders of Southern Africa, said: “The annual increases announced by schemes are varied and most are in excess of CPI.

“This means in real terms medical scheme contributions will take a bigger portion of household income”.

Healthcare cost drivers

The cost drivers for medical schemes in 2018 are spread across different aspects.

Dr Vusi Memela, principal officer of Hosmed Medical Scheme, broke down some cost drivers.

“Hospital admissions account for 41% of scheme claim costs; management of chronic disease and surgical operations by specialists for in and out of hospital constitute 13% of claim costs; 15% of claims is medicines costs, which is made up by dispensing costs and single exit price,” Dr Memela said. “Auxiliary services make up another 4%.”

Additional expenses by way of out of pockets payments to cover some of the healthcare costs are often necessary as benefits run out before the new cycle.

Dr Guni Goolab, the principal officer of Government Employee Medical Scheme, said to avoid additional out-of-pocket payments, scheme members should try to obtain services within the same network of doctors and hospitals where such networks are part of the benefit options.

“An additional point, which is relevant in 2019, is the VAT [value-added tax] increase experienced on April 1 2018,” Goolab said. “The cost of healthcare increased once the VAT increase became effective, but medical schemes were not allowed to adjust their contributions during 2018 to allow for this.”

Board of Healthcare Funders

15% of claims is medicines costs, which is made up by dispensing costs and single exit price.

Dr Vusi Memela Hosmed Medical Scheme