This has been an exceptional year for medical schemes in that the COVID-19 pandemic led to many clients choosing not to have screening tests and elective procedures. This means schemes have spent less than they would in a normal year, with Discovery Health, for the year to date, reporting a 20% to 40% decrease in the usual claim pattern.
However, Daily Maverick reports, COVID-19 has not run its course yet, and schemes have to walk a careful path between restricting increases in recognition of members’ financial distress and keeping enough reserves to manage a potential increase in claims next year.
The Council for Medical Schemes (CMS) issued a circular earlier this year encouraging schemes to keep their contribution increases flat or in line with inflation. “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 the CPI (consumer price index),” Dr Sipho Kabane, the council’s CEO and registrar is quoted in the report as saying.
Only medical schemes that were already in financial distress before COVID-19 may seek increases higher than the recommended 3.9%, the CMS says. “Such schemes must provide the CMS with a detailed motivation for such an increase.”
However, Daily Maverick reports, only two schemes seem to have toed the line on the CMS recommendation. Momentum Health announced an average contribution increase of 3.9%. The country’s largest medical scheme, Discovery Health, has frozen all contribution increases until July next year with the promise that the average increase at that stage will not exceed 5.9%.
Jeremy Yatt, the principal officer of Fedhealth defends Fedhealth’s decision to bring in an average weighted contribution increase of 8.8%. “Cutting benefits is not an option in times like these,” he says.
Jill Larkan, head of healthcare consulting at GTC, observes: “The power lies with members. If you use your medical scheme less, your contribution increases the following year will be less and 2020 is proof of that. Usage of medical services went down as people observed the strict lockdown, with the result that schemes are in a healthy financial position.”
Dr Noluthando Nematswerani, head of Discovery Health’s Centre for Clinical Excellence, says a serious, unexpected consequence of the pandemic is a reduction in screening tests among high-risk members who perceive seeing their doctor as increasing their risk of exposure to COVID-19, says a Daily Maverick report. Discovery’s data shows that, compared with last year, there has been a 44% reduction in breast cancer diagnoses, and a 51% reduction in mammograms performed.
The report says these are alarming stats in light of the fact that cancer remains one of the leading causes of death and dread disease claims in the life assurance industry.
Dr Liana Roodt, specialist breast, endocrine and general surgeon at Groote Schuur Hospital, agrees with Nematswerani, saying the COVID-19 pandemic will claim more lives on the back of the devastating impact on our public healthcare resources, the drop in the number of people able to afford private medical care and people’s reluctance or inability to attend their usual screening examinations.
“I am afraid that we will be dealing with the aftermath of this global pandemic for some time to come,” she says.
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