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AS MEDICAL SCHEMES, members and employers brace for the 2019 financial year, they do so against the backdrop of a technical recession, a VAT increase, petrol price increases and marginal legislative space to innovate.

In what is generally termed ‘the roadshow period’ medical schemes are announcing their 2019 increases but are quick to share the lengths they have gone to in order to contain costs and improve their value proposition. Medical scheme benefits and savings accounts have always been difficult to decipher. It won’t get any easier as schemes push the envelope by redesigning benefits, re-engineer their networks and entice members into closer partnerships.

Discovery, the country’s largest open scheme and covering about 2.8 million beneficiaries estimates total medical inflation for 2018 at between 11.2 percent and 12.2 percent, but assures that its, risk management and Vitality wellness will reduce members’ medical inflation by 2 percent and contain contribution increases accordingly. It and other leading schemes have announced new plans or a rejigging of original ones. One being Aon South Africa’s entry point plan, KeyCare Start. Fedhealth is talking about “a revolutionary funding model which can save members up to 25 percent of their monthly contributions.” Jeremy Yatt, Principal Officer, explains that traditionally, as much as a quarter of members’ annual contributions are placed in their fund’s medical savings account (effectively as a loan) and used to pay for day-to-day benefits. The member is then required to repay this loan over 12 months irrespective of whether the member needs this amount or not. In an innovation he predicts others will be quick to copy, the new models allow members to only start paying for their day-to-day benefits if and when they actually need them. When they do access the funding payback is over 12 months and interest free. It is, Yatt shares, a response to the findings and recommendations highlighted in the provisional report issued by the Health Market Inquiry. Fedhealth also offers a reduced monthly ratebased on each member’s unique profile and the core benefit bundle they select. Bonitas, which reports a major uptick in its reserves (4 billion), has announced a weighted 8.9 percent increase with added and tweaked benefits, despite a challenging year for the healthcare industry. Principal Officer Gerhard Van Emmenis speaks of how the fund continues to work at reducing healthcare costs by seeking partnerships with healthcare providers, being part of the same value chain, rather than being part of the supply and demand of the healthcare economy.There is a focus on educating role players to balance the triangle of affordability, quality and cost efficiencies. He also places hospital negotiations, attention to fraud, waste and abuse as well as managed care high on the priority list. The scheme is also poised to introduce an App to make it easier for members to view their benefits and claims as well as submit claims, obtain authorisation, find a network provider and resolve queries on the go. Medihelp, which reverted to self-administration two years ago, received the highest rating from its members in terms of overall customer satisfaction in an independent South African Customer Satisfaction survey released in August. Principal Officer Heyn van Rooyen ascribes this to ‘a turnaround strategy implemented to create product stability through an enhanced product offering and increased competitiveness whilst maintaining high levels of service delivery.

“ SAcsi’s Perceived Value Index has Medihelp with an improved rating from 70,9 percent to 73,6 percent compared to the industry average which dropped from 71,6 percent to 69,4 percent. It seems that as the going gets tough the tough get going. Just as well, in June Health Minister Aaron Motsoaledi announced sweeping changes to the Medical Schemes Act as he seeks to align it with the planned National Health Insurance. The proposed changes include abolishing the rule of co-payments and the practice of labour brokers within the medical scheme environment. Prescribed minimum benefits would be replaced with a comprehensive benefits package. His aim, he says, is to allow medical aid clients to get better value for money from their service provider. Other changes include the introduction of a system subsidisation model, changes to the cancellation of membership and waiting period and also an end to unequal benefit options.

The MTC:  As consumers battle to make ends meet, an often overlooked SARS rebate is the Medical Fees Tax credit. It is worth taking into consideration when assessing a monthly contribution spend and applies to fees paid by a taxpayer to a registered medical scheme (or similar registered scheme outside South Africa) for that taxpayer and his or her “dependants”, as defined in the Medical Schemes Act. For example, the 2018/2019 SARS year of assessment allows R310 a month each for the person paying the scheme as well as R310 a month for the first dependant and R209 for each additional dependant.

4 Oct 2018 The Star Early Edition