Prescribed minimum benefits (PMBs) covering 271 life-threatening conditions and 26 chronic illnesses are the biggest cost driver for medical aid schemes.
This is according to Medshield Medical Scheme acting principal officer Alan Fritz, who spoke to personal finance journalist and educator Maya Fisher-French.
Conditions and chronic illnesses falling under PMBs must be covered “at cost,” Fritz stated.
However, the problem is not necessarily the range of care medical schemes must provide at cost, but specialist doctors that take advantage of the PMB regulations.
“There are specialists that charge as much as 700% of the medical scheme rate, and these are sucking the schemes dry,” said Fritz.
In its 2020 industry report, the Council for Medical Schemes reported that medical aids spend R866.02 on PMB per average beneficiary member.
This sets a floor for the cheapest medical aid plan in South Africa — they must charge at least R866.02 to cover the average cost of PMBs.
Any additional care offered by even a basic hospital plan would mean additional costs.
Reporting for City Press, Fisher-French said medical aids are becoming increasingly unaffordable for average South Africans.
Basic hospital plans start at R1,500–R2,000 per month for the main member, increasing to around R2,300 per month for a single parent with a child.
South Africa’s medical tax credit makes these premiums more affordable for some members.
However, the credit can only be claimed at the end of a tax year, and only applies to people who must pay tax. That is, those earning over R7,604.16 per month (R11,770.82 for people over 65, and R13,158.33 for people over 75).
Although an advisory committee at the council is working on how schemes could provide low-cost benefit options, including considering a reduced set of PMBs, this has been ongoing for years.
No deadline has been set, and no estimated completion date has been provided.
In the meantime, medical insurance is filling the gap despite many insurers advertising their products as an add-on for basic hospital plans.
According to Fisher-French, medical insurance does not have to provide full PMB coverage because it is not a medical scheme.
This allows insurers to apply risk rating, waiting periods, and limited cover, making them more affordable.
However, it is important to note that South Africa’s medical tax credit does not apply to insurance policies — only to medical scheme contributions.