The Council for Medical Schemes (CMS) has recommended a maximum price increase of 5.4% for medical aid members in 2020.
While the circular cautions medical aid schemes not to exceed this proposed increase, many South Africans should expect to pay more, says Jill Larkan, head of Healthcare Consulting at wealth and advisory business GTC.
“Medical aids routinely exceed these guidelines by an annual average of 3.4%,” said Larkan.
“According to CMS data, an ever-growing portion of the increase is attributable to differences observed in medical aid utilisation, which reflects members’ usage patterns of different service providers annually.”
This means that individuals should expect an average increase of around 8.8% in their premiums for the year ahead, she said.
On this basis, Larkan advises both companies and individual medical aid members to carefully consider their plan types for 2020.
Major medical aid plan prices are typically adjusted by CPI+3% or +4%. With targetted CPU for 2019 sitting at 4.5%, the typical adjustment would be in line with GTC’s findings.
“We recommend employers – as well as individuals who do not form part of an employer group – begin their annual assessments with regards the choice of schemes and plans offered, as a priority.
“Salary increase percentages into 2020 are unlikely to match an 8.8% increase in medical aid premiums, so we’d like to see employers assess the best value-for-money options available to employees, who are no doubt under increasing financial pressure,” she said.