South Africans are advised by Actuaries to tighten up their financial belts against a possible medial aid fee increase.
This follows research by insight Actuaries which revealed that claims in 2016 have been higher than expected and this has had a large impact on open medical aid schemes.
Open medical aid schemes are those that do not have a waiting period for new members and 70% of the scheme’s 5 000 new members have been so far hospitalized.
Government Employee Medical Scheme (Gems) was one of such medical schemes that was badly hit by the increase in the number of members hospitalized.
This call for economic adjustment is no longer news to south Africans as people has since this year, been repeatedly charged to tighten their belts due to the tough economic climate.
The finance Minister first mentioned this when presidential his 2016 financial budgets. It is also believed that the tough economy will extend to coming years.
A Business Day report warned that the cost of medical aid cover will increase next year, while the choice of medical aid providers might shrink.
Insight Actuaries joint CEO Christoff Raath explained that the schemes were going to have to make some financial changes to ensure their income covered their expenses.
“There appears to be general consensus in the industry that 2016 claims experience is higher than expected.
“Our impression at Insight is that this is an industry-wide phenomenon driven by higher utilization rather than higher tariffs, and more hospital claims.
“Most open medical schemes appear to be affected,” Raath said. The magnitude of this effect differs from scheme to scheme and although what we see is not catastrophic, it is not insignificant.
“The tighter margins reflected in the GCR report imply that most schemes cannot retain their current solvency levels in the wake of higher claims experience without making changes [for ] 2017,” he said.
A lack of quality public health care across South Africa has made medical cover a priority for those who want private medical care.
World Health Organization (WHO) stipulated that SA had spent 8,6% of gross domestic product on health care, but this was not enough to bridge the gap between private and public health care.
The proposed NHI health scheme aims to decrease inequality in health care between rich and poor and stats SA’s recent household survey revealed that only 17,5% of South Africans have access to private medical care.
Confirming this rise Health Minister Aaron Motsoaledi said the cost of private health care has increased by 300% over the last 10 years. The cost escalated from R42 billion in 2002 to R142 billion in 2014.
The Open medical schemes are due to announce their contribution increases and product changes from late September.