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BL Premium reports that the Council for Medical Schemes (CMS) has advised the industry to keep 2024 contribution increases as close as possible to the inflation rate, which the Reserve Bank estimates will be 5% in 2024.
It warned that higher-than-inflation increases would add to the financial stress facing households and would risk making membership unaffordable for current beneficiaries. The CMS publishes annual industry guidance before it considers medical schemes’ proposals for changes to benefits and premiums for the upcoming year. SA’s medical scheme market has remained stagnant for the best part of a decade, hovering just short of 9-million beneficiaries. With the exception of the past two years, medical schemes have consistently pegged their annual contribution increases several percentage points higher than the consumer price index (CPI). The Covid-19 pandemic saw an unexpected drop in claims, leading to an accumulation of reserves that enabled below-CPI contribution increases in 2021 and 2022. Now that claiming patterns have normalised in the wake of the pandemic, schemes are expected to motivate for higher contribution increases. The CMS also said schemes would no longer be permitted to defer contribution increases beyond January unless there were exceptional circumstances, as it was confusing for consumers and made it difficult for them to compare rival medical scheme offerings.
- Read the full original of the report in the above regard by Tamar Kahn at BusinessLive (subscriber access only)
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