MedicalIt is that time of the year again when medical schemes launch their new benefit and premium increases for the 2023 benefit years.

The Council for Medical Schemes (CMS) recommends that increases to medical aid contributions for 2023 stay at or below inflation (5.7%). (Read the article here). The CMS requires schemes to approach the council for approval. If an increase greater than 5.7% is proposed by a medical scheme, then the Council will need to be provided with adequate reasoning as to why.

This means a number of schemes will have to provide reasons why they have increased beyond the recommendations of the CMS. We have seen over the past decade that medical scheme increases were on average 4% above inflation. This is no different in 2023 rates that were announced from September 2022 to date.

A few of the larger or more popular schemes have announced the following increases:

  • Discovery Health - They again postponed their increases to 1 April 2023 and expect it to be CPI plus 3-4% and have made no formal announcement on the actual increase.
  • Momentum Health - Momentum will also delay their increases until April 2023 and then hike the increases by 8.5%. They indicated that their net result will be a 6.4% increase.
  • Bonitas Medical Scheme - Bonitas also postponed their Increases to follow the trends set by Discovery and Momentum. They will increase from 1 April between 2.0% and 9.4% depending on the plan. This means an average 5.9% increase across all plans. Bonstart has a 0% increase.
  • Bestmed Medical Scheme - Betmed members will experience an average increase of 8.5%.
  • Medshield Medical Scheme - Medshiled announced a 6.6% increase as of January 2023.
  • Fedhealth Medical Scheme - Fedhelath's average increase will be 8.8%.

This is not a comprehensive list, but I believe the current number of registered open schemes will reduce further over the next couple of years. We have seen one of the older schemes Health Squared (which was a merger between Resomed and Spectramed) be put into curatorship and its members had to urgently look for a new scheme, which was a struggle in itself, since many members of older than 60, battled to find another scheme, and were left in the dark without any medical scheme cover when they needed it the most. Although the CMS agreed with the larger schemes to accommodate these members, schemes are scared to take on the high risk of older members.

This leaves us with another question for many pensioners and older people on the open medical schemes, They have nowhere to go but rely on Government resources when they can no longer afford to pay for a medical scheme. Some of the children will provide for their parents as adult beneficiaries of their schemes, but that placed just another burden on the children. Some schemes will not necessarily be willing to cover the parent if they did not belong to a medical scheme after the age of 35 and did not have a break of more than 90 days between schemes.

Many of these members will also resort to Medical Insurance, which is "cheaper" but it does not provide for the Prescribed Minimum Benefits like a medical scheme and pays only a stated benefit like your short-term insurance.

All medical schemes are worried about their average age, and they need to worry if they do not get enough young people in. Each day we all get one day older, and over a year we are 365 days older. So life goes, and we have no control over that. This means in a scheme, younger people subsidise older people, but older people also subsidise the younger people. This principle of cross-subsidisation makes things for each group more affordable.

I have seen in my practice that many pensioners can no longer afford their medical scheme and have to rely on the government. Many of them have children overseas, but they cannot assist either. The big question is, what can we all do the assist these pensioners to still receive decent medical benefits? Pensioners in Government entities do not have those same challenges, except maybe the Transnet pensioners.

We need to find solutions and have a debate on this matter, in a society where more than 85% of people have no medical schemes and have to rely on the government.

What is your proposed solution to this matter? Please let us know.