Medical Schemes' Healthy Reserves Underpin Lower Premium Increases

The medical aid scheme industry is faced by stagnant membership as South Africans suffer from economic headwinds. Nevertheless, schemes are well positioned to buffer the effect of Covid-19.

- Jaco Visser

Medical aid schemes have experienced a drop in the number and value of members’ claims due to the coronavirus pandemic, resulting in higher reserve levels, even as healthcare inflation continues to bite privately insured South Africans.

In a response to questions, Fedhealth’s principal officer, Jeremy Yatt, said that between 1 January and 31 August, the medical aid scheme’s claims experience was 24% below budget. As claims were higher than budgeted in the first three months of the year, the total claims experience from 1 January to the end of August was 14% below their budget.

Bonitas experienced a similar drop in claims. “The current Covid-19 pandemic led to significantly lower claims than expected in 2020 to date (and) on a per-member basis,” Lee Callakoppen, Bonitas’ principal officer, said in a response to questions. “Including Covid-19 outgo, overall projected claim levels for April to July were on average 22% lower than the expected pre-Covid levels respectively, with notable variations between claims categories.”

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