In a circular sent to medical insurance schemes this week, the Council for Medical Schemes (CMS) has recommended that contribution increases be limited to 4.2% in 2022.
The regulator said that this would be in line with the projected Consumer Price Inflation (CPI) increase.
“In instances where it is economically feasible to implement a lower contribution increase than the CMS recommended CPI-linked rate, Trustees are encouraged to adopt innovative pricing models, subject to an independent actuarial evaluation,” it said.
“The CMS is also cognizant of the heightened uncertainty regarding the impact of the pandemic on healthcare claims costs, as well as how quickly member’s health-seeking behaviour will normalise.
“As such, pricing decisions for the 2022 benefit year should be largely data-dependent and sensitive to the demographic risk profile and financial position of each scheme.”
There are roughly 4 million medical scheme members, with almost 9 million beneficiaries. This represents a little more than one in seven of South Africa’s population of nearly 60 million.
Claims may spike
Some medical schemes may experience sudden spikes in high-cost claims as the pandemic progresses over coming months – though the final economic impact of the pandemic remains uncertain, the CMS said. The schemes’ demographic risk profiles, the size of the population covered, and the extent of existing cross-subsidies within benefit options or schemes will affect the impact.
Additionally, the financial position of each medical scheme prior to the pandemic will dictate how it is able to absorb high-cost claims from the pandemic, it said.
The CMS said schemes should also be cautious of pent-up demand as South Africans aim to make use of their medical aids as concerns around COVID decrease. As treatments for some minor medical conditions were postponed, with increasing vaccination rates, many of these conditions would now require more complex and expensive treatment. The CMS also noted that some healthcare services will be completely forgone, resulting in lower than projected claims costs.
“Studies also indicate that as countries move out of different Covid-19 waves, hospital visit volumes slowly recover, although the utilisation rates of different services remain well below pre-pandemic levels.”