MEMBERS’ RISK PROFILE

improved their 2015 scores by 20.8% and 17.8% respectively.

Gems experienced a decline in its index value in 2016. The scheme incurred deficits at operating and net levels during the year.

Polmed was the top performer in the Sustainability Index. The scheme achieved a fair operating deficit in 2016, increased its reserves and maintained a solvency ratio of more than above 50%, which was significantly above the minimum of 25%.

Bhana says the medical schemes industry overall was fairly stable, and its financial position was sound.

“The year 2018 may hold some challenges, as the industry is faced with consolidation measures in the build-up to the full implementation of National Health Insurance.

“We look forward to the recommendations of the Competition Commission’s Health Market Inquiry to assist with controlling costs and contributions in the industry.”

kabelo.khumalo@inl.co.za ONE OF the most important factors that contributes to a medical scheme’s performance is the risk profile of its members. Some of the key statistics are:

• The average age of beneficiaries;

• The pensioner ratio (defined as the percentage of beneficiaries over the age of 65); and

• The average family size.

The Alexander Forbes report says the average age of beneficiaries has remained fairly constant since 2005, with a marginal increase from 32.3 years in 2015 to 32.5 years in 2016. The average age of members of open and restricted schemes increased slightly in 2016, with open schemes experiencing a slightly bigger increase.

The average age of beneficiaries on open schemes increased by 0.2 years to 34 years, while the average age on restricted schemes increased from 30.5 to 30.6 years at the end of 2016.

“As a scheme ages, we expect the average claims per member to increase, with a generally accepted benchmark of a 2% increase in average claims per year increase in average age,” the report says.

The average pensioner ratio increased from 7.7% to 7.9% in 2016. Open schemes have experienced a greater increase in the pensioner ratio than restricted schemes, with an increase from 8.8% to 9.2% from 2015 to

2016, compared with an increase from 6.1% to 6.3% on restricted schemes.

In 2016, the average family size for restricted schemes increased slightly from 2.38 to 2.39.

The graph shows how your medical expenses (represented here by claims to your medical scheme) increase as you age. Schemes need a substantial portion of their members to be young and relatively healthy in order to subsidise their older, sicker members....