Discovery has confirmed a 7.9% increase in October 2022<\/a>, <\/strong>which\u00a0will carry through to December. Various other schemes increased their contributions earlier in the year, although many were also deferred beyond January.<\/p>\nThe October 2022 increases will almost certainly be followed by scheduled increases in January 2023, said GTC. \u201cInterim increases are administratively expensive and disruptive, and we suspect schemes will return to the traditional January increase date from next year,” said Jill Larkan, head: healthcare consulting at GTC.<\/p>\n
In a Circular published in July (Circular 44 of 2022: Guidance on benefit changes and contribution increases for 2023), the Council for Medical Schemes (CMS) recommended that contribution increases for the 2023 benefit year should not exceed 5.7%, \u201cin line with the 2023 consumer price inflation (CPI) forecast of the South African Reserve Bank,\u201d but that \u201cdue to unique industry-specific cost-push factors \u2026 some schemes may require contribution increases above inflation.\u201d<\/p>\n
\u201cIn previous years, medical schemes have typically exceeded the CMS increase guidelines by around 4%, as is evidenced by the information provided by the CMS in their circular,\u201d said Larkan.<\/p>\n
On that basis, taking into account the anticipated \u2018return to normal\u2019 happening within medical aid claiming patterns being reported by the schemes at the moment, GTC anticipates that the 2023 increase will be in the range of CPI (5.7% forecast by the SARB in their July Monetary Policy Statement) plus 4% (general average increase above inflation provided by the CMS), resulting in an average increase of between 8% and 10% per annum in January 2023 – if nothing else dramatic changes.<\/p>\n
The CMS circular itself notes that \u201c\u2026 medical scheme contribution increase rates have consistently surpassed the CPI, except in 2021 \u2026 [which was] the first time in over a decade that the industry implemented contributions increase below CPI.\u201d<\/p>\n
“The lower-than-anticipated increases in 2021 were due to the financial constraints that South African consumers are facing on the one hand, and underutilisation of the medical aid benefits resulting in record reserves held by the medical schemes on the other,” said Larkan.<\/p>\n
Lower-than-usual usage of medical scheme benefits among members who were fearful of doctor visits and hospitalisation in the context of the Covid-19 pandemic resulted in combined medical scheme reserves growing to a record R73.29 billion in 2021.<\/p>\n
\u201cIf schemes do not, at the very least, keep their increases in line with medical inflation year-on-year, acknowledging that this medical inflation has always outstripped CPI, there will come a time when their members must endure a sudden once-off adjustment to ensure that contribution rates match the anticipated medical inflation increase rates year-on-year,” said Larkan.<\/p>\n
“And in our current economic climate, no member wants to endure that kind of \u2018catch-up\u2019 pain after a \u2018budget-friendly\u2019 financially abundant period of deferred or non-existent annual increases.\u201d<\/p>\n
Larkan advises all members that the relief on personal budgets \u2013 granted by the deferment of increases until October 2022 \u2013 is fast drawing to an end. These October increases as well as the anticipated return-to-normal January adjustments, just four months later, will result in the further tightening of the budget purse strings for many families.<\/p>\n
\nRead: Stop trying to make the NHI happen \u2013 fix what we\u2019ve got: expert<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"\u00a0GTC Healthcare Consulting warns that deferred medical scheme contribution increases in South Africa are likely to be followed by above-inflation hikes in January 2023.<\/p>\n","protected":false},"author":10,"featured_media":590470,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9872],"tags":[10831,26],"class_list":["post-619811","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-bonitas-medical-fund","tag-headline"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/619811","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=619811"}],"version-history":[{"count":4,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/619811\/revisions"}],"predecessor-version":[{"id":619835,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/619811\/revisions\/619835"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/590470"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=619811"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=619811"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=619811"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}