The Council for Medical Schemes in South Africa recommends that medical aids in the country limit their 2024 price hikes to 5% “plus reasonable utilisation estimates”.
This trend was heavily disrupted by the Covid-19 pandemic in 2020, which resulted in below-inflation hikes in 2021 and 2022, with a slight resurgence in 2023 where many schemes opted for deferred price hikes. In addition to this, South Africa is facing widespread adverse macroeconomic conditions – characterised by multi-year higher interest rates due to stubbornly higher inflation rate, a volatile domestic currency and surging energy prices and overall lacklustre economic growth.
Medical aids not only have to cover their base costs but also have to plan ahead for the utilisation of the funds. “Medical schemes must therefore assume reasonable utilisation estimates for 2024 based on historical utilisation data pre-pandemic, the scheme’s current demographic profile, as well as more recent available actual claims data,” it said.
As was the case in the previous year, the CMS said it is concerned that the utilisation estimates submitted by the schemes do not always correlate with the changes in a scheme’s demographic and risk profile.
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