Medical schemes recently announced their average contribution increases and updated benefits for 2021. Bestmed Medical Scheme announced that their average contribution increase for 2021 is 4%, the lowest in the Scheme’s history and another single digit increase notch in the Scheme’s belt for a fourth year running.
Average contribution increases, also known as average weighted increases, reflect the overall contribution increase for the whole Scheme, across the different medical scheme options. The increase of 4% that Bestmed communicates is, therefore, the Scheme’s average weighted increase, as the benefit option increases range from 3.9% to 4.2% across the different options. The medical scheme industry’s average contribution increases over the past few years have been high at around 10% for 2020.
Besides wishing to follow the Council for Medical Schemes’ (CMS’) recommendation to keep contribution increases as low as possible for 2021 due to the economic impact which COVID-19 and the national lockdown have had on South Africa, Bestmed is able to keep their average contribution increase low for a number of reasons. Firstly, Bestmed is the largest self-administered medical scheme in the country, which directly benefits the Scheme’s beneficiaries. The Scheme also achieved a solvency ratio of 35.4% at 31 December 2019 from which can be leveraged.
Bestmed beneficiaries also benefit from the Scheme’s benefit tariff increase at 5%, which exceeds the average contribution increase. In other words, the percentage tariff increase of the amount covered per benefit is higher than the percentage increase of the contribution or subscription fees. There are also no benefit cuts or funding reductions for 2021. Therefore, Bestmed beneficiaries get more value for their money.