| Summary |
There are fewer beneficiaries of medical schemes than a year ago,
according to the latest annual report from the Council for Medical
Schemes. The report, which puts into perspective the state of the industry for the
financial year 2002, also said the total gross contribution income for
all medical schemes increased 16.6% from 2001 to R43-billion in 2002.
The number of principal members edged up 0.97%, but this comes along with
a 1.8% decline in the number of dependants. The average solvency margins
increased to 23.1%, higher than the required phasing-in level set at 17.5%
for 2002.
High solvency margins are intended to protect members and ensure coverage.
The report says this represents a concerted effort to improve the
financial soundness of medical schemes.
Administration costs rose 15.7% from the previous year to R4.1-billion.
These were far higher in restricted schemes, which rose 23.9% to
R899-million, compared with open schemes, which rose 14.3% to
R3.2-billion.
Managed-care costs went down from R986-million in 2001 to R966-million in
2002. Fees paid to healthcare brokers rose 22.5% to R354-million, which the
council attributes to members moving from scheme to scheme. New
regulations on brokers came into effect at the beginning of 2003, and we
are optimistic that this situation will be reversed, the report said.
New legislation has reduced the rampant losses attributable to
inappropriate reinsurance, said the report. Overall reinsurance losses
were R297-million during the year, down 11% from 2001. It is believed that out of 50 applications for reinsurance from the registrar of medical schemes, none has been approved. Riding says there
are instances where reinsurance is justified, especially for small
schemes.
Contributions rose 17.9% in 2002, while claims per beneficiary increased
by 15.9%. Medical schemes continued to show a surplus from operations.
Operating surpluses increased to R1.1-billion, the second successive year
schemes enjoyed operating profits. |
| More Details |
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| Publication Webpage |
http://www.medicalschemes.com/ |
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| Keywords |
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