Consumers will have to fork out up to 10% more for their medical aid schemes from January. Actuaries have warned, meanwhile, that if the government pushes through the Medical Schemes Amendment Bill, premiums could increase by more than 15% for those over 34.
According to a Sunday Tribune report, after multiple price hikes from petrol to VAT, more than 8m South Africans on medical insurance now face higher premiums. The window period to make adjustments between the different plans within a scheme closes at the end of this month.
The report says Discovery Health, with more than 2.8m members, will have a 9.2% hike on average. The sharpest increase of 10% is at the high end. Members will also pay more for children. Momentum, with 260,000 members, will increase by about 10.7%, while Fedhealth will see an increase of 8.5%, Bonitas 8.9% and Bestmed 8.9%.
According to the 2017/2018 Council for Medical Schemes annual report, overall contributions by members stood at R179bn. Acting registrar for the council, Dr Sipho Kabane, is quoted in the report as sayingthat the financial performance for 80 registered schemes was positive in the past year, with net profits at R3.5bn and reserves at around R63.3bn.
Members are irked by these increases, many asking when the new laws would be passed to make health care more affordable. “Every year these medical aids go up and it’s a struggle to afford it. My husband was able to put two of our children on his, while I had the baby and my ill father on mine,” says mother of three Veronica Adams, 46. “But now that he has lost his job, I can’t even afford to add him and the children while keeping on my father, who has a heart condition. I pay close to R8 000 on medical aid and, looking at some of these increases for next year, I don’t know what I’m going to do.”
The report says principal officer at Fedhealth Jeremy Yatt said efforts were made to lesson the financial blow when considering increases. He attributed the increase to medical technology. “Procedures and scans we did not have 10 years are great because it means illnesses that could not be treated are being treated. But the downside is that it costs a lot more,” he said. “We have a team of actuaries and look closely at what we can afford and what we can cut from our benefits to keep the contribution rate down. Every year we go through this process. People will join our scheme because they like the benefit structure, then find they can’t afford it. It’s a sad thing to have this elitist approach. As medical schemes, we are in favour of universal health care and believe we can contribute towards it, if only the government would let us in terms of bringing the private healthcare systems into the NHI (National Health Insurance).”
Recently, Health Minister Aaron Motsoaledi addressed the Stellenbosch University’s Business School on the progress of the NHI Bill and the Medical Schemes Amendment Bill that he introduced in June, the report says. Dr Boshoff Steenekamp, senior strategy adviser at Momentum Health, said the Medical Schemes Amendment Bill sought to deal with many of the governance issues within schemes as well as curb exorbitant salary packages for those running schemes.
The council’s annual report showed a principal member from Bestmed was paid R11.9m, while Discovery Health paid R5.13m and Bonitas R4.9m.
Actuaries have warned, meanwhile, that if the government pushes through the Medical Schemes Amendment Bill, medical scheme premiums could increase by more than 15% for those over 34 years of age. According to Rapport, this is raised by Insight Actuaries in its representations to the Department of Health. Public comments on the Bill closed recently.
The report says Health Minister Aaron Motsoaledi announced the Bill in June, saying it intended to bring ‘immediate relief’ for the public while NHI plans were under way. But Insight says the Bill would have the opposite effect for the majority of members as the Bill caps premiums for children at 20% of adult premiums and at 40% for ‘young adults’ aged 18 to 34. Based on Insight’s calculations, it estimates that the adult rate would have to be raised by at least 15% to put schemes in the same position.
The report says Discovery Health also filed sceptical submissions. Discovery’s Jonathan Broomberg says the minister announced a scrapping of co-payments, but that this is not contained in the Bill. Instead, the Bill just abolishes co-payments on the so-called ‘comprehensive service benefits’ which is apparently a renaming of the current ‘prescribed minimum benefits’.
The position on co-payments would therefore remain the same, Broomberg is quoted in the report as saying.
The largest restricted medical scheme in the country, the Government Employees’ Medical Scheme (GEMS), has announced its annual contributions increases for next year, along with enhancements of benefits. Personal Finance quotes Dr Guni Goolab, the principal officer of GEMS, as saying that the weighted average increase across all benefit options will be 7.1%. “We are pleased to report that our increases in terms of what members will pay out of pocket per beneficiary, per month, will be modest,” Goolab says.
The report says GEMSis reinvesting more than R750m towards the enhancement of member benefits, and there will be a 5.4% enhancement of all in- and out-of-hospital benefit limits across the scheme’s entire portfolio of benefit options.
“We are now able to announce that in 2019 we are introducing an out-of-hospital Primary Care Extender Benefit on selected options. This will provide an extra cushion of R500 per beneficiary per year on the Emerald and Emerald Value options, so that members can continue to access healthcare if their benefits for general practitioner services, prescribed medicine and pathology tests limits run out before the end of the year,” says Dr Stan Moloabi, COO of GEMS.
Families on the GEMS Ruby option will also receive an extra R500 per year to extend their current Out-of-Hospital Block Benefit, if this benefit limit becomes depleted.
Medical aid subscribers have, meanwhile, been left fuming following various reports on Discovery’s plan to distribute the large profit they made in the last financial year as detailed in their annual report.
The Citizen quotes reports saying Discovery’s remuneration committee recently approved R336.6m in bonus payments for the directors as well as management incentives after the money in the bonus pool rose by 33% when compared to the previous financial year. The bonuses will be divided as follows: R15.8m to be shared among seven directors, R265m to be shared among 1,134 managers, and 203 people are set to share the remaining R85.1m.
The annual report also revealed that the company’s chief executive, Adrian Gore, took home R19.8m in the year, including a performance bonus of R7.7m, reports Business Report.
The report says former aide to Nelson Mandela Zelda la Grange shared the article and expressed her outrage at her treatment at the hands of the medical aid scheme who told her that her chronic allowance is depleted and that she must pay the last two months out of her own pocket despite paying north of R5,000 to the company on a monthly basis.
La Grange’s tweet was met with a barrage of complaints in a similar vein from fellow customers – many of whom believe that the proposed National Health Insurance (NHI) scheme is starting to look attractive as stated by La Grange.
Earlier this year, Health Minister Aaron Motsoaledi gazetted a Bill detailing a plan to roll out universal health care in the country through National Health Insurance. The Bill responds to a global campaign spearheaded by the World Health Organisation and linked to the UN’s sustainable development goals to make sure that no one is left behind in accessing quality health care.
The report says the Bill – which has been met with intense opposition – is informed by a vision of ensuring equitable access to quality health services, regardless of a person’s ability to pay or whether they live in an urban or rural area. The proposed insurance fund envisages the consolidation of public and private revenue into one funding pool.
The idea is to enable a more equitable system through, for example, cross-subsidisation and ensuring that essential services are made available.
All people will have to register as users of the fund at an accredited healthcare establishment or facility (whether public or private). And the fund will decide on the health benefits that the facilities will have to provide. This will depend on what resources the facility has. People will be able to pay for complementary health service benefits not covered by the fund.
To be paid, healthcare providers, such as general practitioners and hospitals, will have to register with the fund. They will have to claim for each patient they treat and will have to keep a record of diagnosis, treatment, and length of stay.
The details of Discovery’s bonus payments were laid out in the company’s annual report, reports Business Report. The annual bonus pool payment for the 2018 financial years rose by 33% from the prior year’s pool.
Chair of the Remco, Sonja de Bruyn Sebotsa, said the surge in bonus payments was due to targets having been exceeded. “This increase is due to the profit pool paying out at 98 percent of target in the financial year 2018, versus only 69percent target in the financial year 2017 due to performance conditions,” De Bruyn Sebotsa said.
The group said Gore, who is also the founder of the group, was awarded for among other things the impending launch of Discovery Bank and profitable emerging businesses. The Discovery Bank, which has passed major regulatory hurdles, is set to launch as South Africa’s next big full-service bank in the coming months.
Gore’s second-in-command, the group’s financial director, was paid R10m after he successfully established an unsecured R10bn domestic medium-term note programme listed on the local bourse. Discovery Life chief executive Hayton Kallner emerged as the highest paid executive in the group, taking home R29.2m, mainly due to a R17.6m long-term incentive payment he received. The head of Discovery Invest, Kenny Rabson, was paid R13.7m, while Broomberg was paid R12.1m.Sunday Tribune report (subscription needed) Rapport report (subscription needed) Personal Finance report The Citizen report Business Report report