CAMAF Member Option Guides & Info

3 1.2 Why do MedIcAl scheMe PreMIuMs IncreAse In excess of InflATIon? there are a nuMber of factors which iMpact on the cost increases in Medical scheMes: • technology: many of the new techniques and much of the new equipment used by doctors increase the cost of the service delivered. Whilst this is beneficial to members, practitioners need to recover their costs for this technology and this is usually achieved through increased tariffs. in nearly all cases, the new technology improves clinical outcomes as diseases are detected earlier or identified. • new high cost drugs being registered by the south african health products regulatory authority (sahpra): Research, funded by the pharmaceutical industry, is developing new, high cost treatments for chronic conditions. Once a new drug is registered, the cost of the research is built into the price of the new drug. This drug cannot be copied (generics) until the patent expires, which can run for up to 15 years. • Exchange rate fluctuations and import duties: as the industry is largely dependent on importation of medical products, costs are dependent on the exchange rate and import duties. • Service provider negotiations: schemes are required, by law, to negotiate individually on all price increases with service providers e.g. private hospitals. The competition commission specifically excludes medical schemes from any form of collective bargaining. critical mass to enforce lower prices is therefore not easily secured. • Prescribed Minimum Benefits (PMB's): PMB's are a defined set of conditions and treatments that need to be paid in full by each and every scheme (refer to the cMs website for detail). In terms of the Medical schemes Act, PMB's must be paid by the scheme at cost. It is therefore relatively simple for service providers to charge excessive fees and these must be reimbursed, in full, by the scheme. Owing to the magnitude of the list and payment having to be in full, it is extremely difficult for any scheme to offer a low cost option. 1.3 hoW do I choose The MosT APProPrIATe oPTIon? choosing the Most appropriate option is influenced directly by an individual'S nEEdS and ExPEctationS. it is therefore important to consider the following: • The scheme's benefits • levels of discipline to save for ad hoc, day-to-day expenses • chronic conditions • family size • Income as medical schemes are primarily there to cover unplanned, high value expenses e.g. hospitalisation, it is important to ensure that cover related to these benefits is comprehensive. It is important that you choose an option where the reimbursement rate for doctors in hospital is in excess of the base rate if you cannot afford to pay the difference.

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