Medical aid membership growing

Health expert Alex van den Heever says the Risk Equalisation Fund should have been implemented a year ago as that would bring down medical aid costs. Image: Social Protection

Figures released by Stats SA last week showed the medical aid membership has risen from 16.5% of the population to 18.4% in the past two years.

Wits Professor and Health Economist Alex van den Heever said the growth in membership was "because of Gems and Discovery's low-income option, Keycare. But mostly Gems."

He said the Gems effect "shows what a slight change to subsidies and low-cost administration can achieve for member growth".

Gems Principal Officer Dr Gunny Goolab said: "Since Gems benefit plans are 10% to 15% less expensive than those of other medical schemes, this enables members to choose more comprehensive cover because they can afford it."

Gems uses 7.5% of members' premiums for administration costs, whereas most schemes use between 12% and 13% for non-healthcare costs.

Membership increase is good for SA

Discovery Health, South Africa's largest medical scheme administrator, takes 10% of clients' premiums for non-healthcare costs.

Health Economist Mariné Erasmus says the public health system is already over-burdened and struggling to provide the healthcare needed by South Africans. Image: Econex

Econex Health Economist Mariné Erasmus said: "Any increase in medical scheme membership is a good thing as it alleviates the burden on the public health system, which is already over-burdened and struggling to cope with the demand for services.

"The increase to 18% as suggested by the survey is larger than I expected, but definitely possible," she said. "Econex is waiting for this year's Council of Medical Schemes report that should be released in September, to evaluate those increases."

She said Stats SA's figures could not be completely accurate as they were based on a survey.

"The Econex latest calculation indicated that the total medical scheme population comprised 17% of the population in 2012/13."

Currently, South Africans on medical aid are responsible for 40% of all healthcare expenditure.

Van den Heever and Erasmus said had the risk equalisation mechanisation for medical aids been implemented as planned in 2008, more people would have been able to afford medical schemes.

The Risk Equalisation Fund (REF) is meant to share risks across medical aids so that schemes with costlier, older and sicker members could be subsidised by those with younger and healthier members.

This cuts premium costs and allows more consumers to afford a medical aid.

It was not implemented as planned because the ANC decided it wanted to pursue a National Health Insurance.

Van den Heever said medical aids were in urgent need of regulatory reform, including the REF, to ensure both sustainability and affordability.