It’s That Time of Year Again
Most medical aid schemes have announced their increases, and you have to make decisions about your healthcare benefits.
Read on to see what’s in store and the implications it might have for you and your loved ones.
Medical Aid Increases
The Council for Medical Schemes (CMS) has recommended that medical schemes limit contribution increases to 3.9% in 2021, or freeze them. In July 2020 the medical schemes inflation rate was measured at 3.2%.
Previously the CMS made the recommendation that medical aids accommodate price inflation plus an additional 3%, as this would provide medical aid users with much-needed relief. The question is whether the end result will be aligned to the CMS recommendation.
Increases Published to Date
Momentum Medical Scheme has announced a weighted average annual contribution increase of 3.9% for 2021.
Bestmed’s annual average increase for 2021, at 4%, is the lowest in the history of the scheme.
Discovery Health announced that it will freeze monthly contributions for its medical aid plans for the first half of 2021, after which it will introduce a price increase capped at CPI (Consumer Price Index) plus 2%.
Bonitas Medical Fund says the scheme is freezing the contribution increase on its BonFit Select plan and will have a weighted increase of 4.6% across all plans.
Medshield Medical Scheme says members on the MediPhila plan will experience “an affordable R84 increase in their monthly premiums, with a maximum increase of R350 on their top end plan.”
Fedhealth Medical Aid confirmed a weighted average contribution increase of 8.7%.
Medihelp has announced a 5.8% weighted average increase (differs per option).
Genesis Medical Scheme’s contribution increases in 2021 will be R85 per adult per month and R30 per child per month across all benefit options.
* Errors and omissions excepted and subject to the verification and underwriting protocols of each plan option per medical scheme.
What Can We Conclude?
Increases that each medical scheme has announced do not seem to follow any trend but are rather based on their own reserves and claims experience. It is strange to see increases beyond inflation from certain schemes since many have in fact built up reserves and surplus positions due to low elective procedures and lower claim experience.
The alcohol ban also lowered trauma and emergency services type claims which are all factors that support a lower increase. Healthcare workers, however, are seeking increases of 8% and it is a well known fact that healthcare inflation historically is in excess of inflation.
Costs of the healthcare professional fraternity also contribute to the increase levels so this ultimately is not a simple exercise.
Essentially, if medical inflation increases, so does the price of gap cover benefits and we can expect to see increases beyond inflation also coming through despite low claims incidence.
The CMS has recently extended the deadline for primary healthcare products to 31 March 2021. These products would have been banned by 31 March 2020. One of the determining factors of this extension can be attributed to the finalisation of the low-cost benefit option (LCBO) for low-income earners, which will work in conjunction with the National Health Insurance (NHI) to ensure affordable healthcare for all.
The CMS first has to finalise the revised Prescribed Minimum Benefit (PMB) benefits before it can finalise the LCBO. This, in turn, has caused delays in finalising the NHI.
Covid-19 and Future Economic Challenges
Current economic challenges are set to continue well into 2021 and beyond with the 2nd wave of Covid-19 now seriously impacting Europe and the USA. It is therefore vital to consider your medical aid choices for 2021, ensuring that access to quality healthcare and cover is not compromised.
Exercise has been singled out as the preferred method to reduce anxiety and stress as a consequence of South Africa’s national lockdown. Profmed, which conducts an annual Stress Index to determine the level of stress among its large base of professional members, said that 60% of respondents turned to exercise to channel negative energy and counteract stress. The 2020 Stress Index singled out fear as the main stressor in 2020. “The latest survey reveals the top fears among our professional members as the fear of losing someone close to them, followed closely by the fear of losing their jobs,” said Profmed CEO and Principal Officer, Craig Comrie. He was presenting findings of the 2020 survey during a webinar.
Forewarned is Forearmed
The 2020 Stress Index revealed that professional South Africans were overwhelmed by the volume of media coverage of the pandemic. Their levels of anxiety and stress were magnified by an inability to separate fact from fiction, or to distinguish real news from fake. A third or respondents went as far as to indicate that they were overwhelmed by media coverage of pandemic. “The COVID-19 crisis has forced us to adapt and be responsive; but many respondents felt anxiety [as they sorted through volumes] of factual and fake information,” said Comrie.
Controlling Stress Through Physical Activity
Comrie observed that stress was a part of modern life that had both negative and positive consequences. “Many professionals who indicated that they experienced stress also stated that they know how to control it,” he said. Almost 60% of the respondents in the 2020 Stress Index singled out exercise as their preferred method for channelling negative energy and counteracting stress. “We see exercise playing a far more important role in the lives of professionals in terms of how they deal with stress,” observed Comrie. He opined that the increase in overall levels of stress indicated in the 2020 survey could be due to an inability to participate in outdoor exercise through the early stages of lockdown. Discovery Health, an open medical scheme, turns to the ‘big data’ generated by millions of its members and beneficiaries to support this conclusion re exercise. The group recently urged South Africans to “improve their risk profiles through physical activity” following the 37% reduction in mortality rates observed for its engaged members during COVID-19.
Specialist psychiatrist, Dr Wilhelmina Erasmus, joined Comrie to present on ‘How COVID-19 affected mental health’. She noted that it was too early to draw conclusions about the biological or neuropsychiatric consequences of the pandemic; but was concerned about possible changes in behaviour and cognition. There is concern that dementia-like symptoms, mood disorders and psychosis which occasionally exhibit during an infection could persist. From a purely psychological context, the mental health profession is focussing on anxiety, boredom and exhaustion through the disease, alongside the stigma that may accompany infection. “Patients suffering from the virus are often concerned with whether they will be able to return to their previous level of functioning,” said Dr Erasmus. “They could have impaired attention and concentration, memory and fatigue, and may suffer from guilt due to others taking on their workload.”
Consider Our Client’s Wellbeing
Healthcare consultants and financial advisers may find pointers from the survey results that could guide their future interactions with individual clients and firms. Around 50% of the professionals surveyed indicated that mental health and stress-related support had not been prioritised in the current year. And a staggering 73% of respondents said they had not reached out to anyone about their stress levels. No surprise then, that Profmed noted an increase in mental illnesses as a consequence of the isolation that people experienced through lockdown. Consultants would do well to consider addressing their clients’ psychological support shortcoming in future interactions. Advisers, meanwhile, should consider ways to incorporate mental wellbeing assistance alongside their mainstream financial planning offering.
The uncertainty around COVID-19 has translated into a strong desire among professionals to remain on medical schemes cover. “Our membership numbers are stable, and we have retained 10% more members than the year before,” said Comrie. Profmed’s experience is similar that of Discovery Health, which has noticed a 50% reduction in lapse rates for 2020. “We think that this is a sign that consumers recognise how important [medical schemes] cover is when facing a pandemic,” said Emile Stipp, chief actuary of Discovery, during the group’s recent pandemic update. He added that the medical scheme’s debit order rejections, a good sign of economic stress, were stable too.
Describing the Second Wave
Both Discovery Health and Profmed are keeping a close watch on the mental health impacts of the heightened anxiety and stress their members have suffered through 2020. They have warned that the second wave will not be restricted to a second spike in infections; but could extend to an unexpected mental health crisis. Profmed also raised concerns that the six months following pandemic could see a turnaround in the lapse experience due to financial stresses and the resulting affordability issues. It is clear that the health insurance adviser community.
Talk to Us
Our best advice for consumers out there is to speak to a qualified advisor.
Rockfin advisors can explain the various options available to choose from and guide you into selecting a plan that is suitable for you, from a simple student or hospital plan up to a comprehensive plan that includes day-to-day and wellness benefits.