While the Council for Medical Schemes (CMS) has asked its members to limit increases to 3.9% in line with CPI, actual increases could be much higher. The average increase for 2020 was 10%.
The CMS asked trustees of schemes in a recent circular to take into account members’ affordability constraints although it understands that schemes also need to make provision for possible demand.
“In cases where schemes are unable to freeze their contribution increase for 2021, CMS recommends that schemes should limit their increases to 3.9% in line with CPI.”
The CMS said it believed, in the context of the current Covid-19 induced economic turmoil, that contribution increases above inflation are simply above the budget line for most consumers and are therefore unaffordable for the majority of members of medical schemes. The council also requested that the increase in hospital fees and therapeutic appliances be limited to 3.9% in line with inflation.
Johan Crafford, CEO of Glopin Health Care Consultants expects medical schemes to increase their premiums by 6% – 10 %. He says slightly higher increases are expected for 2021 due to medical schemes anticipating more Covid-19 related procedures.
“The fact that Covid-19 has been classified as a PMB condition, that must be paid in full by any scheme, will be a contributing factor for premium increases. Premium increases are based on the claims history of members. Based on the claims history of the members and in line with inflation, a team of actuaries determines a percentage increase that is affordable to the members and sustainable for the scheme.”
Michael Thiart, corporate account executive at Optivest, also expects medical schemes to follow the CMC guideline. He says medical schemes should be able to afford a small increase, because most elective procedures were cancelled and the only major expense was Covid-10 related expenses. However, Crafford says due to Covid-19, the monetary value of claims in 2020 was higher than in previous years.
Medshield Medical Scheme today launched its benefit options and contributions for 2021 with a 5.9% weighted contribution increase and an approximate 6% increase in selected member benefits. This means that members on the MediPhila plan will experience an R84 increase in their monthly premiums, with a maximum increase of R350 on its top-end plans. These benefit and contributions amendments are subject to CMS approval.