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Medical Aid Funding
South Africa spends more on private health insurance as a percentage of total health expenditure than almost any other country. Although the sector performs a critical role in the health system, medical scheme membership remains out of the reach of over 85% of the population. Although the details remain unclear, the implementation of the National Health Insurance Fund will invariably affect the public and private healthcare systems, including the medical aid funding sector.
Medical aid premiums continue to rise faster than inflation. In response to the high cost of medical scheme plans, many members opt for cheaper options, which saves them on monthly premiums but increases their out-of-pocket medical expenses. Many scheme members rely on gap cover to mitigate the financial burden of their medical expense shortfalls. South Africa’s poor economic performance has augmented the trend of members downgrading their benefit options without readjusting expectations. Reacting to rising costs and sluggish membership growth, and medical schemes have created bare-minimum hospital plans. There are long-term concerns around the exclusivity of private medical schemes because of their unaffordability for majority of people.
Low-Cost Benefit Options
The Council for Medical Schemes announced its intention to discontinue low-cost benefit options which target low income market segments. From March 2021, none of the demarcation products that were established in line with the exemption framework will be allowed and no new products will be permitted. Demarcation products include insurance options from as little as R300. These products provide private healthcare access to over 400,000 people. Many insurance providers are appealing the decision.
This report focuses on Medical Aid Funding, and includes information on the state and size of the sector, developments and corporate actions of its major players, and influencing factors including regulation and the effect of the coronavirus pandemic. There are profiles of 31 companies including major administrators such as Discovery Health, Medscheme and Momentum Health, restricted schemes such as the Government Employees Medical Scheme, South African Police Service Medical Aid and Sasolmed, and open schemes such as Bestmed and Medshield.