How to choose your medical scheme for 2025

Medical scheme contribution increases are at the highest they have been since Covid, which means members need to take more time to consider the various options available to them.

A brief analysis of some of the larger schemes in the industry reveal that most contribution increases are in double digit territory, while those that boast single digit average contribution increases are not far behind.

These are the highest contribution increases implemented since the Covid pandemic in 2020. At that time, in an attempt to help members address the increased cost-of-living crisis, some medical schemes with healthy reserves opted to implement deferred increases. This, however, has translated in some cases to a catch-up game with higher contribution increases now.

The largest medical scheme in the country, Discovery Health, will implement increases ranging from 7.4% to 10.9% across its various benefit options. Ron Whelan, chief executive of Discovery Health says this is largely driven by medical inflation which is currently 3% to 5% higher than consumer inflation. CPI or consumer inflation is at an all-time low of 3.8% in September this year, which means that in some cases the contribution increases are four times higher than inflation!

Some of the average weighted contribution increases already announced include:

• Bestmed – 12.75%
• Fedhealth – 12.4%
• Medihelp – 10.8%
• Bonitas – 10.2%
• Momentum – 9.4%
• Discovery – 9.3%
• Compcare – 11% for principal members and 13% for beneficiaries.

Paresh Prema, head of health actuarial services at Alexforbes, points out that the contribution increases need to allow for CPI, plus an additional margin to account ageing and utilisation (on average usually 2.0%-4.0%), benefit changes, as well as an allowance to maintain reserves, as these are needed protect a scheme during unexpected events.

According to the August 2024 Consumer Price Index from Stats SA, the component relating to healthcare cost inflation stands at 5.1%, outpacing the overall CPI of 4.4%. “A combination of inflation and utilisation rates over recent periods, along with the need for enhanced margins to provide a cushion against adverse experience, has necessitated a contribution increase that exceeds the rate of CPI,” he says.

Dr Ron Whelan, chief executive of medical scheme administrator Discovery Health, says the scheme’s medical inflation this year was driven by three factors:

• Increases in the price of healthcare services, typically in line with inflation.
• Increased demand for healthcare services, as a result of a gradually ageing membership, increasing prevalence of chronic illnesses, and an increasing proportion of high-cost claimants.
• Increases in the supply of healthcare services through new medicine, new medical technologies, advances in medical procedures and increased need for specialised care.

When you are reviewing different contribution increases across various benefit options and different medical schemes, it is worth remembering that these are the average weighted contribution increases, which means your contribution could actually be lower or higher depending on which benefit option you choose for 2025.

Medical schemes give you the option to switch between benefit options and/or medical schemes once a year, usually in November.

While financial strain on your pocket means it is tempting to look solely at contribution costs when choosing a medical scheme, this is an important choice that goes far beyond the amount you pay each month and there are several factors to consider.

What to consider when changing options or medical schemes

Chronic conditions: Chronic conditions are potentially life-threatening conditions where ongoing medication is required. The scheme must cover 25 chronic conditions within set guidelines as prescribed minimum benefits. The more common chronic conditions include asthma, high cholesterol, high blood pressure and diabetes. In these instances, the scheme will have to pay for certain medications as well as certain treatment, which may include blood tests and doctor visits. A healthcare broker can help you register with your medical scheme’s chronic programme, so that your medication is fully covered by the scheme and not paid out from your savings or day-to-day benefits.

Designated service providers or network plans: These plans or options are usually lower in cost, but you are restricted to using specified doctors or hospitals. If you phone the medical scheme, they can email you the list of approved doctors and/or hospitals. Check that you have service providers close to you so that you are able to get to them quickly when you need them most.

Waiting periods: If you are staying on the same medical scheme but simply downgrading or upgrading from one plan to another, your cover will change from 1 January 2021 with no waiting periods. However, if you choose to switch from one scheme to another, you must apply for membership to the new scheme and you may face a three-month general waiting period where no claims are covered except the prescribed minimum benefits (PMBs) and chronic medicines. Or your chronic medicines might be covered but the new medical scheme might pay for a different product.

Pre-existing conditions: If you are switching to a new medical scheme, and you have pre-existing conditions such as asthma or cardiac issues, you could face a 12-month, condition-specific waiting period. This means the new scheme may not cover any costs related to that condition for a year. However, this waiting period can only be applied if you have not been a member of a scheme for 24 months or if you don’t join a new scheme within three months.

Late-joiner penalties: This is applied if you did not previously belong to a medical scheme and are 35 or older. The late joiner penalty is percentage-based on a sliding scale, depending on how old you are and for how long you had no medical aid after 35. It adds an additional cost to your monthly contribution that continues as long as you belong to the scheme and is not a once-off cost.

Will you be liable for co-payments? 100% cover does not always mean you are fully covered. Specialists and in-hospital charges can be up to 400% of the benefits offered by medical scheme. So, if your medical scheme only pays out 100% of tariff, you will be liable for the shortfall or remaining 300% out of your pocket.

Compare apples with apples: With more than 70 medical schemes in the market, narrowing down your choices to a select few helps but you still need to be sure that you are comparing apples with apples. You can do that at the click of a few buttons by visiting the Hippo website - www.hippo.co.za.