Bestmed Medical Scheme, SA’s fourth-largest open medical scheme, has warned that substantial medical schemes contribution hikes bolster support for National Health Insurance (NHI).
The medical scheme said unchecked rises could put more young people off medical aid membership. On Friday, Bestmed became the latest medical scheme to announce hefty rises for its more than 100,000 main members. It proposed contribution rises averaging 12.75% for all options in 2025, subject to Council for Medical Schemes (CMS) approval.
Discovery Health Medical Scheme (DHMS), SA’s largest open medical scheme with a 57.8% market share, told clients last month to expect increases of 7.4%-10.9% next year, depending on plan. MediHelp has proposed rises of 10.8%, Bonitas 10.2% and Momentum 9.4%.
Bestmed CEO and principal officer Leo Dlamini said big rises, unavoidable due to rising medical inflation, harmed the sector’s reputation and reinforced the idea that NHI, which the scheme opposes in its present form, was a cure-all for SA’s healthcare issues, he said. “We run the risk of an industry that’s unaffordable, which alienates customers with our pricing. It is a real long-term concern.
Dlamini said the sector covered only 9-million people, a “small percentage” of the population. When the government looked at tariff rises and inflation within the Reserve Bank’s target range “they would think we are just profiteering and cater for just the elites in society”.
We run the risk of an industry that’s unaffordable, which alienates customers with our pricing. It is a real long-term concern.
“It doesn’t help the narrative against the NHI. If the costs continue to escalate, the 9-million we cover will dwindle to 7-million or even lower. The only thing that will save the industry is if we are able to increase the base, and bring in a bigger pool of young people. We are unable to do that because as part of the Medical Schemes Act, we must cover prescribed minimum benefits (PMBs), which on average before we add anything else add about R1,000 a month to cover. This is why we have been pushing for exemptions from providing PMBs.”
It is uncertain whether the CMS will approve proposed increases. In July, it urged the sector to protect members from extra financial hardship and the risk of losing health cover, saying: “Medical schemes are hereby advised to limit the contribution increase and cost assumptions for tariff increases for the 2025 benefit year to 4.4% plus reasonable utilisation estimates.”
Medical scheme membership has been flat for years, due largely due to high unemployment. Medical inflation and scheme contributions increases have for years exceeded the consumer price index (CPI).
Dlamini said that in 2021 and 2022 many schemes increased contributions by less than CPI, as they accumulated reserves during the Covid-19 pandemic.
But with claims returning to pre-Covid levels, he said, schemes had to safeguard their sustainability by managing reserves and ensuring contribution rises were at levels commensurate with claims and expenditure.
“We’ve also seen growing demand for mental health services exacerbated by the pandemic (and post-pandemic realities), alongside an increased prevalence of chronic conditions such as diabetes and hypertension resulting in rising claims.”
DHMS flagged the increase in chronic conditions alongside the cost of technology in the healthcare sector as among the factors that were pushing up medical inflation.
According to the company’s data, beneficiaries with chronic conditions have risen from 15.8% in 2008 to 33.1% this year. Discovery Health, a health insurance division of the Discovery group, administers DHMS.
Dlamini flagged a surge in specialists and oncology costs, coupled with the high incidence of fraud as being among the cost drivers.
“We have seen an upswing in fraud in the industry. An example is of somebody who died at a hospital in Gqeberha, and before the family is even informed, a doctor in Polokwane sends a claim of the deceased person for speech therapy.
“On the face of it, this would seem to come from a legitimate practice. In a space of three weeks we have identified numerous such incidents.”
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