Medical aid increases and costs

Medical aid increases and costs

What do medical aid scheme contribution increases look like in 2023?

In 2021 and 2022 medical scheme increases were somewhat lower than in previous years when increases typically exceeded inflation by around 4%. This was mainly as a result of the industry that experienced a decline in risk claims during the Covid-19 pandemic when members deferred elective procedures or were hesitant to seek medical treatment. Schemes consequently built-up additional reserves, which in turn enabled them to apply lower-than-usual annual contribution increases.

In 2023, however, medical schemes’ increases have returned to “normal” again, in other words, above inflation. Schemes are once again experiencing an upward
trend in hospital admissions and associated healthcare claims.

Private healthcare in 2023

The Council for Medical Scheme’s (CMS) directive to medical schemes in South
Africa was to limit their 2023 contribution increases to 5.7%. However, the CMS failed to identify the basis on which this percentage was applied.  Put differently, 5.7% of what exactly, as each medical scheme offers different benefits with different contributions.

Furthermore, there was no directive (and there never has been) by the CMS to
private hospitals, doctors and other service providers to limit their cost increases to 5.7% for 2023 for no reason other than the fact that the CMS has no legal jurisdiction over these service providers. In addition, there is thus no logic to the CMS attempting to force medical schemes to limit contributions without any limit on expenses, especially when it forces the “pay-in-full” Prescribed Minimum Benefit (PMB) regime.

In short, medical schemes have no control over expenses whilst being
compelled by the CMS to limit contributions. The elephant in the room is the fact that no one dare, it seems, question doctors and other providers about their costs or the fees charged. It is far simpler to blame medical scheme for not paying in full whatever amount is claimed by the doctors.

Private healthcare in 2023

The Council for Medical Scheme’s (CMS) directive to medical schemes in South
Africa was to limit their 2023 contribution increases to 5.7%. However, the CMS failed to identify the basis on which this percentage was applied.  Put differently, 5.7% of what exactly, as each medical scheme offers different benefits with different contributions.

Furthermore, there was no directive (and there never has been) by the CMS to 
private hospitals, doctors and other service providers to limit their cost increases to 5.7% for 2023 for no reason other than the fact that the CMS has no legal jurisdiction over these service providers. In addition, there is thus no logic to the CMS attempting to force medical schemes to limit contributions without any limit on expenses,  especially when it forces the “pay-in-full” Prescribed Minimum Benefit (PMB) regime.

In short, medical schemes have no control over expenses whilst being compelled by the CMS to limit contributions. The elephant in the room is the fact that no one dare, it seems, question doctors and other providers about their costs or the fees charged. It is far simpler to blame medical scheme for not paying in full whatever amount is claimed by the doctors.

Medical Scheme
Hospital Plan
Benefit Option

Average
contribution
increase (%)
for 2023

Genesis
MED-100

4.8%

Genesis
MED-200

4.8%

Bonitas
BonEssential Select

5.9%

Bonitas
BonEssential

5.9%

KeyHealth
Essence

7.0%

Bestmed
Beat 1 Network

8.5%

Medihelp
MedVital Elect

7.5%

Bonitas
Hospital Standard

5.9%

Bestmed
Beat 1

8.5%

Discovery
Essential Delta Core

8.2%

Medshield
MediCore

6.7%

CompCare
MedX ED

8.9%

Discovery
Coastal Core

8.2%

Discovery
Classic Delta Core

8.2%

Momentum
Evolve

8.5%

Momentum
Custom: Associated Hospitals,
Chronic: Associated

8.5%

Cape Medical Plan
Healthpact Premium

8.0%

Discovery
Essential Core

8.2%

Discovery
Classic Core

8.2%

CompCare
MedX

8.9%

Medical Scheme
Hospital Plan
Benefit Option

Approximate
Rand-value
increase:
2 Adults +
2 Children

Genesis
MED-100

R187 p.m.

Genesis
MED-200

R250 p.m.

Bonitas
BonEssential Select

R262 p.m.

Bonitas
BonEssential

R298 p.m.

KeyHealth
Essence

R320 p.m.

Bestmed
Beat 1 Network

R381 p.m.

Medihelp
MedVital Elect

R334 p.m.

Bonitas
Hospital Standard

R418 p.m.

Bestmed
Beat 1

R423 p.m.

Discovery
Essential Delta Core

R435 p.m.

Medshield
MediCore

R488 p.m.

CompCare
MedX ED

R497 p.m.

Discovery
Coastal Core

R502 p.m.

Discovery
Classic Delta Core

R513 p.m.

Momentum
Evolve

R523 p.m.

Momentum
Custom: Associated Hospitals,
Chronic: Associated

R535 p.m.

Cape Medical Plan
Healthpact Premium

R535 p.m.

Discovery
Essential Core

R544 p.m.

Discovery
Classic Core

R642 p.m.

CompCare
MedX

R665 p.m.

The above table illustrates clearly that a lower percentage (%) increase does not necessarily equate to a lower Rand value increase. Similarly, a higher percentage (%) increase does not necessarily equal a higher Rand value increase.

The exclusive use of percentages (%) as the only criterion to indicate, and also compare, medical schemes’ increases is therefore inaccurate, misleading and inappropriate if the basis on which the increase is calculated is not the same. As can be seen from the above example, an 8.5% increase for a family of four on the Bestmed Beat 1 Network hospital plan equated to R381 per month, but on Momentum’s Custom option, the same percentage increase (8.5%) equated to R535 p.m.

To further demonstrate the irrelevance of the use of percentage increases, the above example of the 8.5% increase on the Bestmed vs Momentum hospital plans equate to a Rand-value difference of 40%. In other words, Momentum’s annual contribution increase of 8.5% works out to be 40% more, in Rand-value tems, than Bestmed’s 8.5% increase.

In short, the use of a percentage as a yard stick only works and is meaningful when the denominator is the same for the comparison that will then only apply to members of each particular medical scheme. Percentages cannot be used to compare different medical scheme contribution increases.

Make the right choice

There is no doubt that South Africans are experiencing very challenging times financially. Each month the challenge of stretching and balancing the budget takes on a new meaning with the ever-increasing cost of living and rising inflation. Instead of cancelling their medical aid cover altogether, members of medical schemes should consider their benefit options carefully and do their homework properly.

Expensive medical aid or hospital plan cover doesn’t buy a better bed in hospital. All plans provide more or less the same in-hospital cover for “the big accident, illness or disease”. Remember, hospital beds are owned by the hospital and all that members of medical schemes do is rent the bed for a period. One must then ask why one should pay more to a medical scheme to occupy the same bed as every member of every other medical scheme?

And lastly, don’t be mislead by the percentage (%) of your annual contribution increase. That percentage only applies to your medical scheme. Take account l,of what the cost is in money and what benefits attach to that money paid.

The information provided herein is for information purposes only and is not intended to flout or in any other way compromise the conditions prescribed in the Financial Advisory and Intermediary Services Act’s General Code of Conduct insofar as comparing different financial products with each other is concerned. Nothing herein contained is intended to be advice and any uncertainty regarding anything said should be referred to an accredited financial advisor.

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