Medical aids advised not to increase more than CPI plus 1

Medical aid schemes may not increase monthly premiums by more than 5% for 2024, thanks to recommendations by the Council for Medical Schemes (CMS).

The council announced on Tuesday the maximum limit on medical aid tariff increases, to cushion members against the harsh effects of rising inflation – an attempt to keep premiums in line with the Consumer Price Index (CPI).

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‘Cushioning consumers’

CMS Regulation Executive, Mfana Maswanganyi said in a circular, “it is evident that most household budgets will remain constrained for the foreseeable future – leaving most consumers in precarious financial position.”

“To cushion members of medical aid schemes against further financial distress, and the probable risk of losing their health insurance cover due to affordability constraints, medical schemes are advised to limit their cost assumptions for contribution increases for the 2024 benefit year to 5.0%, in line with CPI,” he said.

Factors considered by the CMS when determining the cap limit:

• Higher inflation rate
• Volatile domestic currency
• Surging energy prices
• “Overall lacklustre” economic growth

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Higher levy looming?

Senior Manager of Benefits Management, Mondi Govuzela, told The Citizen tariff limit will not affect prescribed member benefits – and the council doesn’t anticipate an increase in levies.

 “…But that’s something we’re looking into, going into 2024,” he added, saying the council does consider preservation of member benefits.

He also said that membership benefits are protected by provisions of the Medical Schemes Act.

Top medical aid schemes compared

The Citizen compared basic membership premiums among popular medical aid schemes. Discovery emerged as the most expensive, with Fed Health offering the lowest monthly fees.

• Discovery – R1565
• Momentum Health – R1539
• Bonitas Medical Scheme – R1338
• Fed Health – R945

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Low-cost medical aid benefits

When it comes to the regulatory framework to provide low-cost medical aid to consumers, Registrar, Dr. Kabane said the council is currently in the final stages of compiling a document of research findings and recommendations which it would send to the health minister by the end of August.

“The health minister is a key stakeholder in the process. We don’t want to make any pronouncements before he’s [had a chance] to engage with the document,” Kabane said.

Covid-19 effects

Maswanganyi said the use of healthcare services was impacted by the Covid-19 pandemic in the last two years, with a decrease in actual utilisation post-Covid.

“While emerging trends point towards a normalisation path and return to the pre-pandemic health-seeking behaviour, there’s still a high degree of uncertainty about clear post-Covid utilisation trends,” he said.

Maswanganyi said utilisation trends for 2024 are based on historical utilisation data pre-pandemic, the scheme’s current demographic profile and recent date on actual claims.

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Limit not cast in stone

CMS Chairperson, Dr. Mondli Makiwane said the recommended 5% limit is “not cast in stone,” but medical aid schemes that intend to exceed the bar will be required to motivate the need for a higher increase.