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Medical Aid Funding in South Africa
BY Rebecca Viljoen
South Africa
10 November 2020
R 14 400.00 (ZAR)  
estimated $ 872.54 (USD) *
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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.


Affordability


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.


Report Coverage


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.


Page
1. INTRODUCTION 1
2. DESCRIPTION OF THE INDUSTRY 1
2.1. Industry Value Chain 5
2.2. Geographic Position 8
3. SIZE OF THE INDUSTRY 10
4. STATE OF THE INDUSTRY 13
4.1. Local 13
4.1.1. Corporate Actions 20
4.1.2. Regulations 20
4.1.3. Enterprise Development and Socio-Economic Development 23
4.2. Continental 24
4.3. International 25
5. INFLUENCING FACTORS 28
5.1. Economic Environment 28
5.2. Government Interventions and Regulations 29
5.3. Population Health 32
5.4. Coronavirus 33
5.5. Input Costs 34
5.6. Fraud, Waste and Abuse 35
5.7. Research and Development (R&D), Technology and Innovation 36
5.8. Labour 38
5.9. Environmental Concerns 39
5.10. Cyclicality 40
6. COMPETITION 40
6.1. Barriers to Entry 43
7. SWOT ANALYSIS 44
8. OUTLOOK 45
9. INDUSTRY ASSOCIATION 46
10. REFERENCES 47
10.1. Publications 47
10.2. Websites 47
APPENDIX 1 - SUMMARY OF NOTABLE PLAYERS 49
Major Open Medical Schemes 49
Major Restricted Medical Schemes 50
Major Medical Fund Administrators 51
PROFILES OF NOTABLE OPEN MEDICAL SCHEMES 53
BESTMED MEDICAL SCHEME 53
BONITAS MEDICAL FUND 56
DISCOVERY HEALTH MEDICAL SCHEME 59
FEDHEALTH MEDICAL SCHEME 61
KEYHEALTH MEDICAL SCHEME 63
MEDIHELP MEDICAL SCHEME 65
MEDSHIELD MEDICAL SCHEME 67
MOMENTUM HEALTH 69
SIZWE MEDICAL FUND 71
PROFILES OF NOTABLE RESTRICTED MEDICAL SCHEMES 73
ANGLO MEDICAL SCHEME 73
BANKMED MEDICAL SCHEME 75
CHARTERED ACCOUNTANTS MEDICAL AID FUND 77
GOVERNMENT EMPLOYEES MEDICAL SCHEME 79
LA-HEALTH MEDICAL SCHEME 82
MOTO HEALTH CARE 84
NEDGROUP MEDICAL AID SCHEME 86
PLATINUM HEALTH MEDICAL SCHEME 88
PROFMED MEDICAL SCHEME 90
SAMWU NATIONAL MEDICAL SCHEME 92
SASOLMED MEDICAL SCHEME 94
SOUTH AFRICAN POLICE SERVICE MEDICAL SCHEME 95
TRANSMED MEDICAL FUND 97
PROFILES OF NOTABLE MEDICAL FUND ADMINISTRATORS 99
3SIXTY HEALTH (PTY) LTD 99
AGILITY HOLDINGS (RF) (PTY) LTD 101
DISCOVERY HEALTH (PTY) LTD 103
MEDSCHEME HOLDINGS (PTY) LTD 106
METROPOLITAN HEALTH CORPORATE (PTY) LTD 109
MOMENTUM HEALTH SOLUTIONS (PTY) LTD 111
MOMENTUM THEBE YA BOPHELO (PTY) LTD 113
PROFESSIONAL PROVIDENT SOCIETY HEALTHCARE ADMINISTRATORS (PTY) LTD 115
UNIVERSAL HEALTHCARE ADMINISTRATORS (PTY) LTD 117