Johannesburg - The "old excuses" for huge premium increases by medical aid funds annually are not acceptable any more, says the National Consumers Union.
It says it is now high time that the Council of Medical Schemes takes action.
The union was reacting on Monday to announcements by several medical aid funds that they would have to increase their premiums higher than the inflation rate next year.
Union chairperson Lillibeth Moolman says that, with the strong rand and a single-digit inflation rate, there's no reason to increase premiums by up to 18% as proposed by some medical aid funds.
She says: "The old story that the increases are a result of expensive modern technology, an attempt to reach reserve levels (25% for 2004) and compulsory chronic benefits are not acceptable any more.
"It's time the administrators go back to the drawing board and start again," she says.
Pat Sidley of the Council of Medical Schemes says they have received only a few applications to increase premiums, as required by law, and she can't say how the picture will look like next year.
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"Perceptions that premiums may increase by 20% on average are just fiction at present."
It seems as if most large medical aid funds will increase their premiums for next year by between 11% and 15%, but some may increase by 18% and more.
Bernie Clark, deputy chief of health-care consultations at Alexander Forbes Financial Services, says he doesn't think medical aid funds want to show "super profits".
They are merely over-cautious and conservative, because they are afraid of the impact of compulsory minimum chronic benefits, which will be introduced next year.
Gary Taylor of Medscheme medical aid administrators says some of their medical aid funds are not planning premium increases and others will increase by between 5% and 10%.
The few schemes that are planning to introduce higher premiums, are doing so to build up the obligatory 25% reserve levels for next year.
Adrian Baskir of Old Mutual says medical inflation of between 8% and 15% is another reason for increases. Premiums for their Oxygen fund's nine options are to increase by 11% on average.
Baskir and Taylor sounded a warning that people shouldn't focus on the average increase, but on the financial implications of each plan.
Average expected premium increases from January 1 2004 (reserve levels have to be 25% at the end of next year) are:
Medihelp 14,6% (reserve, end September - 22,67%)
Medshield 12,6% (reserve, end 2002 - 7,21%)
Liberty 11% (reserve, end 2002 - 13,84%)
Fedhealth 14,8% (reserve, end 2002 - 14,35%)
Resolution Health 12,81% (reserve, end 2002 - 16,49%)
Bonitas - standard 4% (reserve, end 2002 - 10,49%)
Discovery 13,3% (reserve, end September -10,2%)
Oxygen 11% (reserve, end September - 23%)
Metropolitan Health closed fund 10% to 13%.