With a flurry of new NHI regulations breaking ground in 2017, medical aid schemes in South Africa are under pressure with an uncertain future. However, one thing is always guaranteed – price increases.
Discovery Health has announced that customers can expect an increase to contributions in 2018, with the weighted average coming in at 7.9% across its plans.
- Executive and Smart plan options will be increasing at an average of 7.3%
- Core and Saver plan options will increase at an average of 7.6%
- Priority and KeyCare plan options will increase at an average of 8.3%
This increase is not as large as the jump seen in 2017 (where the average was 10.2%), but remains high above inflation, which is around 6% this year. However, Discovery maintains that the increase is below medical aid inflation – the indicator it uses to decided its price increases for medical aid schemes – which is estimated to be at 9% this year.
“Over the 12-month period of August 2016 to July 2017, average CPI was 5.93%. Using CPI + 3% as an indication of medical inflation, the average medical inflation over this period was 8.93%. Thus, the DHMS average increase of 7.9% is well within the medical inflation corridor of CPI+3%,” Discovery said.
The group said that its rates are currently 15.1% lower than its competitors, and it expects that this gap will widen in 2018.
Along with the price increases, Discovery Health clients can also expect enhanced offerings, it said, with improved maternity and child benefits, and extended international health coverage for members on the Executive scheme.
Other new benefits include over-the-counter cover for Schedule 0-2 medicines on the Smart plan, and increased limits on all benefits (in line with each individual plan-specific contribution increase).
The group will also introduce a new technology platform called DrConnect, which will allow members to connect directly with a network of health professionals from smart devices. The platform uses AI to connect 105,000 doctors with millions of patients around the world to answer health questions.
This will be available to clients through the Discovery App, the group said, and will also connect patients to doctors who already treat them.
Discovery said it will release official pricing changes to members in October.
The table below outlines the ballpark changes to ‘Classic’ plans, based on the the rates mentioned above.
|Classic Discovery plan||2017 price (principal member)||Average increase||2018 estimate|
|Executive||R5 544||7.3%||~R5 950|
|Classic Priority||R2 968||8.3%||~R3 215|
|Classic Saver||R2 577||7.6%||~R2 770|
|Classic Core||R1 918||7.6%||~R2 065|
|Classic Smart||R1 535||7.3%||~R1 650|
|KeyCare Access (R0 – R5 050)||R644||8.3%||~R700|
Medical aids in South Africa are in a tough position as the government moves forward with its National Health Insurance plans. Regulations published this year, with a plan to be implemented in 2018, will uproot many established schemes, and force others to change.
To meet the regulations, the Council for Medical Schemes (CMS) is planning to scrap smaller medical aids, as medical schemes with fewer than 6,000 principal members will no longer be allowed to operate within the country.
This is expected to impact over 200,000 medical aid members.
A further 2 million scheme members are also expected to be hit hard by the new regulations, as the government will seek to use medical aid tax credits to finance the NHI, which would push the overall affordability of private healthcare much lower.
Research has shown that, without tax credits, established medical aid schemes will become too expensive for many South Africans in the lower-middle class.
Health minister Aaron Motsoaledi has indicated that not only will the NHI be compulsory, but could also be considered as a replacement for medical aids. However, as many private healthcare services are not covered by the NHI, medical aids will still have a role to play.