The Council for Medical Schemes (CMS) recently published its annual report for the 2017/18 year, detailing the state of medical aid schemes in South Africa.
The report covers medical aid reporting and usage from 2016 to the end of 2017, recording about 4 million medical aid scheme members, and just under 8.9 million beneficiaries, across 81 registered schemes in the country.
Of the 81 schemes, 21 are open medical schemes – which are open to everyone – and 60 are restricted schemes, which are typically offered to companies internally, or to government departments, nationally.
As part of the report, the CMS includes a statement of comprehensive income across all schemes, which, among other things, details the number of members belonging to each group, as well as the total contributions paid in 2017.
Combined, all medical aid schemes pull in R162.9 billion in contributions, while paying out R144.5 billion in relevant healthcare costs. After accounting for administration costs, broker fees and other impairments and losses, the industry is left with a net surplus of R8.92 billion.
According to the group, Discovery has the largest medical aid scheme by some measure with 2.747 million beneficiaries, followed closest by the Government Employees Medical Scheme (GEMS) with 1.8 million beneficiaries – the biggest restricted scheme in the country.
But when it comes to total contributions, Discovery members aren’t the ones paying the highest average in the market.
Discovery members paid a total of R48.7 billion in contributions in 2017, which averages at around R1,477 per beneficiary per month (R3,100 per member per month). Of the 21 open schemes, this places Discovery on the more affordable side (ranking 14th, overall).
This is also below the average for open schemes (R1,544 per month), and below the average for the entire medical aid scheme industry (R1,535 per month).
The scheme with the highest average monthly contribution per beneficiary is the Keyhealth scheme, with its R1.96 billion in net contributions averaging at R2,231 per beneficiary per month. Keyhealth has just over 73,300 beneficiaries, according to the CMS.
Keyhealth is followed by Spectramed (R1,924 per month), SelfMed (R1,917 per month), Resolution Health (R1,824 per month) and Bestmed (R1,776) rounding out the top 5.
It must be noted that this is purely a look at the average contribution per month among medical aid schemes, and not a comprehensive look at the benefits and services offered by each.
Commenting on the high averages of some of the medical schemes, SelfMed said that all information around medical plans needs to be taken into account – while data published by the CMS report needs to be handled with due care.
“Every medical scheme, and especially open medical schemes, offers several benefit options that vary in their contributions and therefore in the benefits offered. The current legislation does not allow for a medical scheme to offer a benefit option with different contributions and benefits, therefore different benefit options need to be created for each contribution level that the scheme wishes to offer,” the group said.
“In the case of SelfMed Medical Scheme we have several benefit options that range from entry level affordable options to high level comprehensive options – when the contributions for these benefit options are calculated as an average it seems as if the scheme is more expensive than other schemes which is not the case. This also impacts the other Schemes mentioned in the report as well.”
High averages can also arise when dealing with legacy plans within a scheme, where high-cost plans were once in vogue and have been retained in a more affordable plan market.
“It is very important for any person that is needs to obtain coverage from a medical scheme, or to move to another scheme, to understand the differences in the contributions and the benefits, when you require the cover and you are not adequately covered it could have disastrous consequences,” the group said.
The tables below outline the medical aid schemes (both open and restricted) which have the highest average monthly contributions per beneficiary as at the end of 2017.
Looking at restricted schemes, more than half are above the national average, with Parmed Medical Aid coming out as the highest, with an average monthly contribution of R3,863 per beneficiary per month.
Monthly medical aid fees are one of the biggest charges consumers have to face each month – with an average increase of between 8% and 10% expected to hit members in 2019.
According to data from medical aid companies, the industry generally follows the guideline of CPI+3% when determining price increases every year, but this has not always been the case.
Data published by financial advisory group GTC shows that the average increase across medical aid schemes over the last decade has hit as high as 6.4 percentage points above inflation, with the average since 2006 sitting at CPI+3.4%.