Medical aid members will have to gird their loins for sizeable premium increases by Discovery, Momentum and Bonitas from January, as inflation and other costs take their toll.
The weighted increase across the Discovery Health Medical Scheme plans will be 7.5% – with some 27% of its members seeing an increase of more than 10%. Its Executive (+12.9%) and Coastal Core (+12.9%) plans will see the biggest hikes, while its Classic Saver plan will go up by only 3%.
Momentum Medical Scheme’s weighted average increase for 2024 will be 9.6%, while Bonitas Medical Fund plans to implement a weighted increase of 6.9% across its nine plans.
Damian McHugh, chief marketing officer for Momentum Health Solutions, told News24 that claims costs had increased to higher than pre-Covid levels, while simultaneously, inflation meant the average cost per claim had also gone up.
Dr Ryan Noach, CEO of Discovery Health, said its medical scheme continued to incur Covid-19 costs, which totalled R700m last year. So far this year, some 3 500 Discovery members have been admitted to hospital with Covid.
He added that large interest rates hikes had hit members particularly hard, and data showed a strong correlation between high interest rates and younger members “prioritising other living expenses over medical insurance contributions”.
Bonitas saw a 25% increase in the number of mental health hospital admissions, and said that mental health problems – particularly in the 18 to 44 age group – were at an all-time high.
These were exacerbated by the increased economic burden and increased psycho-social challenges – like load shedding.
The company has included depression as a chronic condition in its plans.
Profmed Medical Scheme CEO Craig Comrie said the growing burden of healthcare inflation, driven by factors like advanced medical technologies and the rising prevalence of diseases, posed a significant challenge, and that the company was actively actively engaging healthcare providers … and pursuing innovation to ensure members have access to quality services while controlling costs.
“If we look at current cost trends, it's projected that in 10 years, the cost could be as high as R2 600 per member per month, compared with the R1 000 today,” he said. This far outpaces salary inflation, making it an urgent issue for medical schemes and their members to navigate.
Several factors contribute to the rising claims costs, including medical technologies, treatments, surgical and medical procedures, but while these are often lifesaving or extending, they come at a cost of millions of rands
“Additionally, our young population is paradoxically burdened with a high prevalence of diseases like cancer, cardiovascular, and even staples like diabetes and tuberculosis – consuming a substantial portion of the healthcare budget.”
Another contributing factor is the shift in the average age of South Africans.
“We now have a higher average age, with a rising incidence of obesity, hypertension, cardiovascular disease, and diabetes. These lifestyle-related health conditions are further straining the system and driving up costs.”
As the cost of claims continues to climb, medical schemes face unique challenges, with the loss of younger members having a substantial impact on cost increases.
“Traditionally, younger members cross-subsidised older members, but younger members are now joining medical schemes far later in life. Rising unemployment levels means even graduates are not finding work, which disrupts the balance … For each year a medical scheme ages, this increases the costs on average by 3%-5% above inflation.”
In the South African context, this issue differs from many other developing countries where ageing populations have been a long-standing concern. South Africa, with a blend of first and third-world economies, necessitates reformation of healthcare in general for medical schemes and those that access public health facilities.
While NHI is an effort to address the problem, Comrie warns that in its current draft, the BIll offers little hope of improving the situation.
Global challenge of rising costs
Skyrocketing healthcare costs and unaffordable treatments are not unique to South Africa.
“This is a global issue. Every economy worldwide is grappling with the growing healthcare needs, with a restricted number of health practitioners – that translates to less access to health for citizens who live longer and therefore require more care.”
He said healthcare advancements have extended life expectancy significantly. People now live longer, necessitating more extensive healthcare services and treatments. The rising rate of individuals living beyond the age of 100 is adding to this challenge.
News24 article – Discovery, Momentum and Bonitas announce hefty fee hikes (Restricted access)
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