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Mediclinic News : Medical aid clients sick of annual hikes

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Medical aid clients sick of annual hikes

Date

2017-01-29

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SUNDAY TIMES If Johannesburg communications consultant Lianne Osterberger hadn’t downgraded her medical aid, her family of four would have been paying more than R10 000 a month in premiums. A steep, above-inflation increase in her premium forced her and her husband to change to a cheaper medical aid plan. It restricts which hospitals they can use, but it’s a compromise she can live with. Annual medical aid premium increases have been two percent above consumer inflation for the past 16 years, said Casper de Vries, senior actuarial specialist at Alexander Forbes. Most medical aid premiums increased this year by between nine percent and 10 percent, with Discovery’s Coastal Core plan up by 14.9 percent. Experts say the trend is unsustainable in the long-term and even the regulator of medical aids admits the industry needs more young and healthy members. But people in their 20s cannot afford medical aid. Jill Larkin, head of healthcare consulting at GTC Financial Services, who advises on medical aids, said she noticed many clients downgrading to cheaper plans this year, as she did herself when she realised her premium equalled her car repayments. She said that at this rate premiums will eventually outstrip a person’s salary. But she warned that when consumers cut costs by getting a cheaper plan, they weren’t necessarily saving money. She said you carry the risk, you absolutely will pay for more in the end. You will have less money in your day-to-day spending accounts for GPs and dentists. The Government Employees’ Medical Scheme (Gems) said 50 000 of its 694 262 principal members changed options this year - mostly downwards. The scheme expected this and designed a plan, Emerald Value Option, with cheaper benefits, restricting members to certain hospitals and forcing them to see GPs before a specialist, to keep the plan cheaper. Discovery Health Medical Scheme said it had a higher percentage of people buying more expensive plans (3.1 percent) than downgrading, but the percentage of members downgrading had increased from 2.6 percent last year to 2.9 percent this year. Last year, 1.2 percent of Bonitas Medical Fund members changed to cheaper plans. This rose to 1.8 percent this year, according to the scheme’s CEO Kenneth Marion. Most consumers stay put on their medical aid, research by the Competition Commission market inquiry last year showed. Only 16 percent of those surveyed suggested any real commitment to changing the medical aid they were on. But Damian McHugh, head of health marketing at Momentum Health, warned that if people weren’t forced to downgrade this year, they would do so in future if these increases continue. The strain on medical aid schemes, which have increasing numbers of older and sicker members, is beginning to show. In 2015, the medical aid industry ran at a R1.2-billion loss, from R500-million the year before. Most medical aid options in 2015 paid out more than they earned in premiums. But De Vries said that due to the relatively large reserves held by medical aid schemes, the industry remained financially stable. The increases in premiums are partly driven by increased visits to doctors and hospitals. Gems principal officer, Guni Goolab, said that five years ago, one in six people on the medical aid scheme were on chronic medication - it is now one in four. Elsabè Conradie, spokeswoman for the Council for Medical Schemes, said that rising prices were “definitely a concern. She said membership growth in the younger age group was needed to protect the risk pools of medical schemes.
Created at 2017/02/08 02:35 PM by Mediclinic
Last modified at 2017/02/08 02:35 PM by Mediclinic