How the medical schemes industry performed in 2019-2020

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The CMS launched its 2019-2020 annual report on Tuesday, indicating that the medical schemes industry experienced a slight increase in the total number of medical scheme beneficiaries, from 8.92 million in 2018 to 8.95 million in 2019.

Positive trends in the medical schemes industry, such as the ability of schemes to comply with the 25% solvency requirements and an increase in the number of efficiency discounted options through lower annual contribution increases offered a consoling view of the industry.

However, the increase in the proportion of beneficiaries covered by the EDOs was of great concern, according to the Council of Medical Schemes . The proportion of beneficiaries covered by EDOs increased to 25.8% in the past five years. An EDO is an option with the exact same benefits as its main option, but with reduced contributions due to restrictions placed on members to only use certain healthcare providers or provider groups.Medical schemes have to apply and be granted exemption to have EDOs registered. The number of EDOs increased from 40 in 2014 to 69 in March 2019.

The CMS regulated 78 registered medical schemes in 2019, of which 20 were open schemes and 58 restricted schemes. Open schemes accounted for 55.38% of the medical scheme beneficiaries. Discovery Health was still the biggest open medical scheme, while the Government Employees Medical Scheme remained the biggest restricted scheme.

GEMS also experienced the highest year-on-year growth with 53,102 new beneficiaries. Principal members covered an average of 1.20 dependents, decreasing from 1.32 in 2018. The average age across schemes was 33, up from 32.8 in 2018. Approximately 40% of all medical schemes members were in Gauteng, followed by the Western Cape with 15% and KwaZulu-Natal with 14%.Positive news contained in the annual report include that schemes had maintained an average solvency ratio of 35.

 

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