nottheaverageactuary

Actuarial news and views from Cape Town and beyond

Why medical aids are so expensive

5 Comments

Why medical aid is so expensive

The article above is Jonathan Broomberg’s (CEO Discovery Health) view of why medical scheme contributions are increasing year-on-year at a rate well above general price inflation. This is part of the current public hearings phase of the Competition Commission inquiry into the level of contributions and the sustained high increases therein year-on-year.

But this is just one view, and is that of a medical scheme. The Board of Healthcare Funders, the BHF, which is a lobby group for medical schemes and their administrators places the blame at the doors of private hospitals and specialists:

Why medical aid costs are soaring in SA

But what about the amounts schemes pay to their administrators or managed care organisations (who operate on a for-profit basis)?

What about the role of anti-selection given that medical scheme membership is voluntary and there are restrictions to underwriting, minimum benefits, etc.?

Join the debate!

Advertisements

Author: actuarypete

Actuary/Lecturer/Adventurer

5 thoughts on “Why medical aids are so expensive

  1. I am still wrapping my head around the restrictions to underwriting in medical schemes in SA! Thanks for sharing these articles with the class 🙂

  2. Nope, but you are only allowed to move options at the end of every year.
    If not in the waiting period, pregnancy benefits are a PMB, so regardless of option, you are guaranteed of a minimum level of cover. Exactly what that minimum level is and what it includes is shrouded in the mystery that is benefit complexity in general!

    Here is a one-pager giving some guidance: https://www.medicalschemes.com/files/CMScript/CMScript9Of2010_2011.pdf

  3. On a related note, I found an article explaining in succinct detail how exactly Gap cover works. It’s quite an old article but it was quiet helpful for me. Here’s the link:
    http://www.bullseye.co.za/what-is-gap-cover-and-do-i-need-it/

    What I found most interesting is that Gap cover providers pay out benefits to the members who then have to pay the service providers. Can anyone explain why such regulations require this arrangement?

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s