Healthcare providers in both developed and developing countries have common fears. Aging populations with increased vulnerability to chronic illnesses are threatening the viability of many healthcare systems.

According to the WHO

• Globally, cancer is one of the top 10 leading causes of death. It is estimated that 7.4 million people died of cancer in 2004 and, if current trends continue, 83,2 million more will have died by 2015. Among women, breast cancer is the most common cause of cancer mortality, accounting for 16% of cancer deaths in adult women.
• There are 33,2 million people living with HIV, revised down from 39,5 million in 2006.
• Tobacco kills a third to a half of all those who use it. On average, every user of tobacco loses 15 years of life.

We live in a world of finite resources where choices and trade - offs have to be made.

Tax Talk.  In the business times, Professor Mathew Lester, professor of taxation studies at Rhodes University answered the question of what you can do to protect yourself from rising medical costs. He answered this question by saying that people should save lots, and them some, for medical expenses in retirement.

Some positives for those 65 and older. Medical expenses become fully tax deductible for tax payers over 65 years old.

Medical Scheme contributions

Accoring to the 2007 Council for Medical Schemes annual report, there are 7,478 million people covered by medical schemes. Total contributions received by medical schemes during 2007 was R64.7 billion. This money is primarily spent in the private sector.

Medical Schemes and GAP cover

One of the most interesting cases over the course of the year was a recent Supreme Court of appeal ruling in favour of Guardrisk, a subsidiary of Alexander Forbes, over its GAP cover products.

In exchange for a premium, the product covers the shortfall beteen doctors’in-hospital charges and medical scheme rates. The Registrar of Medical Schemes had attempted to close the product, arguing it was doing the business of a medical scheme.

The council for medical schemes argued that the sale of GAP cover, insurance policies sold to those who require financing to cover the difference in the payout covered by the medical scheme and the real costs of treatment, undermines the principle of community rating. The Supreme Court ruling found that the Guardrisk’s short term insurance medical gap cover to be legal in terms of the definition. On May 21st, the constitutional court denied the Registrar of Medical Schemes leave to appeal, dismissing application with costs.

According to Neil Kirby of Wekmans, who argued the case on behalf of Guardrisk, the Supreme Court agree and held that the word “and” means “and” and not “or” as contended by the Registrar.

With ever increasing medical aid costs and very often the limited benefits that are sometimes imposed it is very important to consider the use of “GAP” cover as an additional safeguard for your financial security and well being.

At around R85.00 per month for your whole family giving an additional 300% GAP cover should not be overlooked.

Solvency trends

Regulation 29 of the MSA prescribes that the minimum accumulated funds of medical schemes should be at least 25% of gross contributions, usually refered to as the “reserves” of a scheme. When expressed as a percentage of gross contributions, this is known as the solvency margin. Schemes that do not have the required reserves have to raise money by increasing contributions, reducing benefits or both of these. Growing shemes have particular difficulties in maintaining or growing their solvency levels. This, amongst other things is the reason that “generally speaking” we at Brian Anderson Brokers recommend Discovery Health as our 1st choice. This in no way limits you to them alone as we have some 4 other schemes to use and quote against.

Claims paying ability

When considering a medical aid scheme or the change from one scheme to another one must carefully evaluate this very important aspect of financial soundness.

Check your medical schemes global Credit Rating.

If given a “AAA” this is the best with highest claim paying ability. The risk factors are negligible.

“CCC” There is substantial risk that members and contract holders will not be paid when due. Judged to be extremely speculative. And then those in between – you be the judge

 

Government Employees

It is compulsory for new civil servants to join GEMS (Government Employees Medical Scheme). In order to encourage growth, civil servants who join GEMS receive a more generous subsidy from the state than those who belong to other medical schemes. Members of the lowest entry level option qualify for 100% subsidy from their employers, the civil service. Fuelled by the unprecedented growth in interest, GEMS became the largest restricted medical scheme during the course of 2007 with the scheme reaching over 250 000 principal members in mid 2008.

Here’s to your good health from all of us at Brian Anderson Brokers cc