Along with the rise in day-to-day costs, every new year brings a hike in medical aid contributions.
Africa talks to Chris Jones, head of technical marketing at Discovery Health Medical Scheme about what determines the level of this annual increase.
What's key to that is how your health care costs have increased over the prior year... We'll go and see over the prior year how have those claims increased across the medical scheme and that helps us to determine what should the contributions be for the next year for members across your various medical aid plans.— Chris Jones, Head of technical marketing - Discovery Health Medical Scheme
Members often complain though, that their benefits shrink as their premiums increase. This is what Jones had to say:
The difficulty I suppose, from a medical scheme's perspective is that it's a not-for-profit entity and you have to try and balance everything across your set of members, so on Discovery Health Medical Scheme you have 2.8 million members, it's trying to balance everything, to ensure that members have got a rich set of benefits and at the same time that remains affordable.— Chris Jones, Head of technical marketing - Discovery Health Medical Scheme
When we look at why contributions are increasing every single year by say CPI plus 3 - 4% the key reason is because more individuals are utilising the various different benefits... as well as there's greater supply of healthcare services... so that ultimately leads to this cost pressure which unfortunately results in contributions increasing.— Chris Jones, Head of technical marketing - Discovery Health Medical Scheme
Jones says medical inflation is the key factor determining the increase in members' premiums.
We found that for 2018, medical inflation was sitting at around 11.1% but what's important I suppose, is why?— Chris Jones, Head of technical marketing - Discovery Health Medical Scheme
Just to give you a feel for that on the demand side, we've now got one in four members on Discovery Health Medical Scheme have a chronic condition and this is an increase quite significantly since the past ten years, it's increased by about 61%.— Chris Jones, Head of technical marketing - Discovery Health Medical Scheme
For more on what drives medical inflation, listen below: