Despite the precarious financial state of many South Africans, industry regulator, the Council for Medical Schemes (CMS), has issued a new guidance note saying that schemes can increase their contribution fees for 2022.
Some relief, however, will be felt in the recommendation that the hike is not greater than 4.2%, the average inflation rate that Treasury and the SA Reserve Bank expect for next year.
Many medical schemes are currently sitting on record reserves, reports Fin24, having paid much lower hospital claims in the past year than they usually do. Although annual medical aid contribution increases were always much higher than the average consumer inflation in the past, the CMS now uses CPI as a proxy measure for affordability, given the salary cuts and job losses suffered by so many households due to COVID-19.
Because of the uncertainty about how the virus will affect medical aid claims in the long term, notes Fin24, the CMS advised medical schemes to prepare for the possibility that hospital admissions may rise again as people catch up on deferred surgeries and other medical needs.
Claims directly related to the pandemic could climb, too, as evidence shows that the prevalence of "long COVID" is also increasing (persistent COVID-19 symptoms and other health complications that develop among survivors.)
While medical schemes with high, accumulated reserves should be well insulated against this spike, those that were already financially week pre-pandemic might be vulnerable in the long run, and if higher claims are seen, some schemes might even be forced to merge, the CMS added.
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