Medical scheme Medshield has increased its annual monthly member contributions by a weighted average of 10.9% as a result of inflationary pressures. However, the scheme has also enhanced benefits by a minimum of 6% increase across the board.
The adjustments will be effective from 1 January 2018.
Medshield explained that the annual increase has been necessitated by a number of factors, including annual tariff increases by service providers, the introduction of new treatments and technologies in the healthcare sector and the need to remain competitive and ensure long-term sustainability of the scheme in a fiercely competitive sector.
In addition, the price adjustment also provides for enhancements to specialised radiology, where major enhancements were made after benchmarking against the industry and to ensure that the scheme’s offering in this area is more competitive. In addition, the adjustment also provides for increased utilisation of benefits, as members tend to claim more frequently as they age.
Principal Officer of Medshield, Dr Stanley Moloabi, explained that although the price adjustments may be seen to be higher than those already announced by other large schemes, the scheme has made a concerted effort to cushion the blow and give its members a softer landing by funding part of the increase from its relatively high reserves.
“We have taken a conscious decision to also increase our members’ benefits across the board by 6%, which in turn stretches the rand value for our members and renders the scheme more competitive in terms of the benefits we offer,” said Dr Moloabi.
Dr Moloabi explained that while the weighted average adjustment has increased slightly when compared to recent years, the base line from a monetary perspective will still render Medshield affordable.
“While Medshield has one of the highest reserve ratios in the industry at 46%, we are mindful of the scheme’s sustainability going forward, and need to strike a balance with regard to the proportion of the reserves we use to cushion the increase in member contributions against ensuring the most compelling and comprehensive benefits for members, and at the same time ensure sustainability as we grow,” said Dr Moloabi.
Dr Moloabi added that Medshield has experienced a 3% higher than budgeted for membership increase since December 2016. Thus far, the Scheme has grown its membership by 6.7%. “This can be attributed to our competitive benefit richness, the partnerships and the support we receive from our brokers,” said Dr Moloabi.
“We are mindful of the mounting pressures on our members’ disposable income due to the rising costs of living, and having announced contribution adjustments that seems higher than those already announced, affordability remains the scheme’s number one priority.We used a portion of the scheme’s reserves to ensure that the scheme remains affordable while maintaining a high reserve ratio. When we consider the price increase and compare it with what the industry has announced, it may seem our percentage increase is on the upper end, but when you look at contributions in relation to benefits, our monthly contribution base is comparatively lower than that of our competitors,” continued Dr Moloabi.
Going forward, Dr Moloabi said that Medshield will continue to focus on attracting younger members, improve its claims experience, utilise reserves to support lower premiums in a prudent manner where possible, thus ensuring the long-term sustainability of the scheme.
“We remain committed to facilitating access to affordable and high quality healthcare for our members through a range of healthcare benefits that resonate with the healthcare needs of our members,” said Dr Moloabi.
“We are always cognisant of the changing healthcare landscape and will continuously strive to offer improved healthcare solutions that are cutting-edge, relevant and affordable, while ensuring that the long-term sustainability of the scheme is not compromised,” concluded Dr Moloabi.