PMBs are a critical factor in the increase in medical schemes' expenditure.

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According to the BHCF, by law schemes have to cover PMBs in full. However, the problem is that service providers can levy unspecified charges for PMBs and that medical schemes cannot pay or really budget for these in advance.

The BHCF proposed that legislation regarding PMBs be amended to limit costs and to ensure medical schemes remain viable.

Against this backdrop the minister submitted a basic healthcare package to the department of health for consideration. It includes revised PMBs and also the department of health's primary care components and health clinics' standards.

The BHCF says that this proposal took cognisance of recent policy developments emphasising the development of a basic benefits package (BBP). The BBP must be a safety net and provide a minimum accepted standard of care.

During a recent meeting between the minister and medical scheme representatives and administrators, the tariff increases of medical schemes again came under the spotlight.

The minister stated that she is concerned about the fact that most schemes have increased their contributions by between 9% and 15% - well above the inflation rate. Medical schemes, however, insist that their costs are driven by price increases of inter alia professional healthcare providers, hospitalisation and all the medical supplies used, increased occupation rates and the high cost of medical technology.

The minister was also concerned about the level of medical fund reserves, which is estimated at 38% on average for the industry and considerably higher than the 25% required by the Medical Schemes Act. According to the BHCF this high average is driven by small schemes with very high levels of reserve.

The BHCF also says that the solvency rate needs to be reviewed against the backdrop of the establishment of the risk equalisation fund and international trends in this regard.

Letitia Watson, Sake-Raport
 

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