We all shop around for good value – whether buying a car, groceries, clothing or something as important as a new home. But what about medical scheme cover? How can we ensure we get the best value for our healthcare rand?
Let’s take a look at what you get for your healthcare rand and why it is sometimes necessary to increase medical scheme contribution rates.
Understanding contribution rate increases
Just like most commodities, medical scheme contribution rates are impacted by inflation. Each year, healthcare providers, including doctors and hospitals, raise their prices, often well above the consumer price index (CPI). Then, there are non-healthcare expenses, including operational costs, consultancy fees, regulatory compliance, and administrative, marketing, and communication costs.
Another crucial factor to consider is the Single Exit Price (SEP), which determines the government-regulated price for medicines in South Africa. When the SEP increases, the cost of medicines rises, affecting medical aid contributions.
Beyond inflation – other cost drivers
Costs don’t just increase because of inflation. Several other factors come into play:
- Age and claims: As the average age of scheme members increases, older members tend to claim more, leading to higher numbers and claim volumes.
- Disease burden: There’s a growing burden of lifestyle diseases like high blood pressure and diabetes, with more members registering for chronic benefits each year.
- Technological advances: Continuous developments in technology and medication help us live longer, more productive lives. However, these advancements come at a higher cost.
- Legislation: Medical schemes in South Africa must by law hold a certain level of assets or reserves, substantially contributing to the annual increase in contributions.
Enhancing benefits for members
To protect our members from the eroding effects of inflation, we also increase benefit limits. This ensures that your benefits do not reduce over time. These enhancements account for a sizeable portion of the total contribution rate increase.
What do you get for your money?
Medical schemes play a vital role in providing access to quality healthcare when needed. We cover the costs of medical treatments, hospital stays, medicines, and other healthcare services. By pooling contributions from members, we can negotiate better rates with healthcare providers and offer a safety net for unforeseen medical expenses.
Our commitment to your health is reflected in our approach to providing healthcare cover. We strive to offer real value at every opportunity while ensuring you have access to the most appropriate care at all times.
Legal requirements and healthcare cover
By law, medical schemes must cover the treatment of more than 270 medical conditions, known as prescribed minimum benefits (PMBs), 26 chronic diseases defined in the Chronic Disease List (CDL), and all emergency conditions. While PMBs offer excellent protection, they have also led to some unintended consequences due to some unscrupulous healthcare providers taking advantage of the system.
Collaborative solutions
As an industry, we are working hard to address rising costs. Medical schemes have highlighted the need for a more primary care-focused healthcare model within the private sector. A regulatory model outlining how best to deploy valuable healthcare resources will further help streamline the industry.
Emphasising preventative care, such as regular diagnostic tests and health screenings, can reduce the need for hospitalisation and safeguard the wellbeing of medical scheme members.
Taking control of your health
Healthcare costs are a complex and emotive issue. While the industry debates these challenges and the government moves towards a national health scheme, medical aid members and the broader population must take an active role in their health.
We encourage you to empower yourself and your family through a disciplined and balanced approach to life. Take control of your wellbeing, seek treatment sooner rather than later, and adopt a preventative attitude to your health.
Moving forward
As we move into 2025, staying informed about these factors and understanding their impact on your medical aid contributions is crucial. By doing so, you can better appreciate the value and necessity of your medical scheme. We remain committed to ensuring you continue receiving the best possible care and support through these changes.
Stay informed, stay healthy, and get the best value for your healthcare rand.