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BusinessLive reports that SA’s medical schemes regulator has advised the industry to limit 2025 contribution increases to the SA Reserve Bank’s inflation forecast of 4.4% plus “reasonable estimates of benefit utilisation” to ensure members can retain their cover.
The Council for Medical Schemes (CMS) pointed out that consumers remained under “serious financial pressure” due to high interest rates, and warned that the cost-of-living crisis combined with high household debt levels could affect members’ ability to afford medical scheme premiums. “Although private medical inflation generally exceeds the CPI (consumer price index) by 2% or 3%, CMS believes that the annual industry price increase assumptions should be closely tied to the CPI. In the current challenging economic climate, raising contributions above the inflation rate is simply above the budget of most cash-strapped consumers,” CMS acting registrar Mfana Maswanganyi said in a circular on Wednesday. He went on to note: “High medical scheme contribution rates also create a barrier for new entrants looking to join the private healthcare industry, posing a threat to the industry’s long-term sustainability.” Just over 9-million people were medical scheme beneficiaries at the end of 2022, the latest year for which data is publicly available. Medical scheme membership has remained flat for many years, largely due to SA’s high unemployment rate. In a separate statement, the CMS said health Minister Aaron Motsoaledi had appointed Maswanganyi acting registrar for three months, after former registrar Sipho Kabane’s term ended on 31 July.
- Read the full original of the report in the above regard by Tamar Kahn at BusinessLive
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