Medical aid members should prepare for substantial premium increases from Discovery, Momentum, and Bonitas in January due to inflation and other costs. Discovery Health Medical Scheme will see an average 7.5% increase in premiums, with about 27% of members facing hikes exceeding 10%. The Executive and Coastal Core plans will experience the most significant increases at 12.9%, while the Classic Saver plan will rise by 3%. Momentum Medical Scheme anticipates a 9.6% weighted average premium increase for 2024, and Bonitas Medical Fund plans a 6.9% increase across its nine plans. Damian McHugh, Chief Marketing Officer of Momentum Health Solutions, mentioned rising claims costs and inflation driving up average claim expenses. Dr. Ryan Noach, CEO of Discovery Health, highlighted Covid-19 costs, which totaled R700 million last year, and the impact of high interest rate hikes on members. Bonitas observed a 25% increase in mental health hospital admissions, especially in the 18 to 44 age group, attributed to economic burdens and psycho-social challenges. Profmed Medical Scheme's CEO, Craig Comrie, stressed the challenge of healthcare inflation, driven by advanced medical technologies and the rising prevalence of diseases. He also noted potential cost increases to R2,600 per member per month within a decade, surpassing salary inflation. Rising claims costs are influenced by factors like medical technologies and lifestyle-related health conditions. Changing demographics, an aging population, and increased health conditions contribute to the cost burden. Younger members joining medical schemes later in life due to rising unemployment disrupt the traditional cross-subsidization model. This challenge is unique to South Africa and requires healthcare reform. The issue of rising healthcare costs is not unique to South Africa and presents a global challenge, driven by longer life expectancies and the need for extensive healthcare services.
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The FIA Intermediary Experience Awards is the most prestigious and well-known annual recognition event in the South Africa financial services industry for more than 20 years. The Awards recognises product providers (insurers) for the products, solutions and services they offer to the end-consumer through our member intermediaries or financial advisers.
This year's winners are: Sanlam won long-term insurer of the year (risk). The non-life insurance awards were split by sector. Santam won for personal lines; Western National for commercial; and Hollard for corporate. Allan Gray won two awards for investment products: lump sum and savings. Discovery Health won for healthcare Momentum Corporate for employee benefits. We congratulate these product providers for winning this prestigious award. We as Daberistic have had long-term relationship with these product providers, and we will continue to offer the best insurance and investment solutions to our clients. S.A. government bonds endured a tough second quarter, delivering a negative return of 1.5%. Longer maturity issues were especially weak and sold off heavily alongside the rand, as adverse investor sentiment contributed to increased volatility in the domestic bond market. Despite attractive yields, foreigners have remained net sellers over the last few years as concerns around loadshedding continue to detract from the investment thesis for local currency government bonds. Nowadays most medical schemes have a new-generation option that will typically be a hospital plan with a savings portion. This means the consumer has the peace of mind that he can go to a private hospital for procedures and has a small savings account for day-to-day expenses. What is a medical savings account? The medical savings plan is designed to cover day-to-day expenses while having fewer restrictions on the choice of providers. The consumer gets a total annual amount that is available in advance in his Medical Aid Savings to account for medical expenses. If a consumer joins the medical scheme during the year, this amount will be calculated pro rata. In terms of legislation, this amount may not exceed 25% of his annual premium. Once the savings are exhausted, the consumer will be responsible for any further day-to-day expenses. Any positive balance in the savings account at the end of the year will be carried over to the next year. If the member exhausts his savings component before the end of the year and switches to a new scheme or resigns from the scheme, the scheme may expect the member to repay the difference in savings to the scheme. The amount repayable by the member is the monthly savings multiplied by the number of months left in the year. Here are seven tips to make your medical savings last longer: 1. KNOW YOUR PLAN Understand what you’re covered for, at what rates and with which providers. Does your plan cover you at the medical scheme rate or at a higher rate? Does your plan require you to make use of a hospital or pharmacy network? Refer to the material you receive from your medical scheme, use their website and talk to your financial adviser about what your options are. 2. KNOW YOUR DOCTOR’S RATES Patients are often embarrassed to discuss money with their healthcare provider, but when you make the appointment, ask what rates your doctor charges and whether you’ll be liable for any co-payments. That way, you can make informed decisions about how you’re spending your healthcare funds. If affordability is your greatest concern, it might be better to shop around for a provider who charges scheme rates, but if choice is more important to you and you’re happy to pay more, you’ll know upfront exactly how much. 3. TAP INTO NETWORKS YOUR SCHEME MAY HAVE Some medical schemes have network arrangements in place with healthcare professionals. By using a network, the scheme pays the professional directly, reducing administrative hassle and keeping costs down for you. The Discovery Health Medical Scheme, for example, has an extensive GP network where members are covered in full for doctors’ consultations. We recommend that our members call us or visit our website before they see a healthcare professional, so they know which of these are part of a network. 4. IF YOUR SCHEME OFFERS DIRECT PAYMENTS WITH CERTAIN SPECIALISTS, YOU CAN BENEFIT TOO For example, Discovery Health Medical Scheme has direct payment arrangements in place with most of South Africa’s specialists on most of its plans. If you see one of them, you won’t be liable for any co-payments. If you choose to see another specialist, you may need to pay upfront or pay a portion of the costs yourself – depending on your plan. Find out what your options are. Don’t be afraid to discuss and agreed rates with your specialist. 5. CHECK FOR FULL-COVER ALTERNATIVES In the case of medicine for a chronic illness, schemes often have formularies – lists of medicine that are covered in full by the scheme. Check with your doctor or pharmacist if your prescribed medicine is covered in full and ask about options if not. 6. PAY IN CASH FOR OVER-THE-COUNTER MEDICINES If you have a medical savings account, don’t claim for items not normally covered by medical schemes, for example, over-the-counter headache tablets, cough preparations, etc, from your savings. Paying cash will help the money in your savings account last longer, so you have funds available for more serious, more expensive out-of-hospital treatments. 7. STAY HEALTHY! It seems obvious, but people often overlook the fact that by taking care of their health, they can reduce their healthcare costs in the long term. Make use of your scheme’s preventive screening benefits for regular health checks and live a healthy life. In the case of Discovery Health Medical Scheme, members have access to a range of preventive screenings funded by the scheme. Members can join Vitality, which rewards them for being healthy. Please contact our Health Department, email health@daberistic.com , to find out about different Medical aid options Load shedding, or power outages, has become a daily reality. South Africans' favourite app is EskomSePush (ESP) which is used to check the latest load shedding stage and load shedding schedules. So how does a household cope with load shedding in South Africa? 1. Invest in Backup Power Solutions: Investing in a generator or solar backup power system can help provide electricity to your home during load shedding. Generators are the most common form of immediate power backups and can be set up fairly quickly and easily. Solar backup systems can provide the long-term reliability you need, while using renewable energy sources. 2. Use Power Saving Appliances and Devices: A lot of electricity can be saved by using energy efficient appliances and devices. Switching to LED light bulbs, automated power strips and smart outlets can help save energy and money in the long run. 3. Invest in Uninterruptible Power Supplies: Uninterruptible Power Supplies (UPS) are essential for essential household equipment such as computers, routers and telephones. They provide power for a limited period after a power cut so you can stay connected and work efficiently. 4. Insulating Your Home: Heat sensitive equipment such as freezers and fridges should be insulated with material such as bubble wrap to ensure their contents can remain cool during a power cut and reduce the amount of power required to restart them once the electricity returns. 5. Plan Ahead: Stocking up on essential food items, storing enough water, and setting up a makeshift ‘life support’ system with enough cell phone and laptop chargers, can help you cope with load shedding. Making sure you have all of the necessary items prepared and ready beforehand can really help. 2022 has witnessed the worst stock market and bond market performances globally in the last 40 years. While we advise clients to be patient and not withdraw or change their investment portfolios (at the wrong time), as we expect the market to recover in the next 12 to 18 months, we also understand you as investors are looking for alternative investment options that provide high, secure returns. In this article we highlight 3 options.
1. Fedgroup Secured Investment Fedgroup Secured Investment (Participation Bond) has been around for over 30 years. It is a five-year investment, giving investors a fixed interest rate return over the five-year period. Currently it has a special offer, giving investors 12.6% p.a. compounded return over 5 years. If an investor invests R1,000,000. he would get R1,611,335 (capital and interest) back at the end of five years, after our advisor fees. The interest income may be subject to tax, based on your tax position. If your marginal tax rate is 35%, then your after-tax return is 8.19%. If your marginal tax rate is 45%, then your after-tax return is 6.93%. 2. Guaranteed growth investment This type of investment is offered by life insurance companies using an endowment product structure. You make a lump sum investment, at the end of five years you get the maturity value back, tax free. Life insurance companies use their tax planning to offer this investment product. For a R1,000,000 investment, currently the life insurance companies offer the following after-tax yields: Discovery - R1,398,439, 6.94% Liberty - R1,380,442, 6.66% Momentum - R1,403,175, 7.01% Old Mutual Wealth - R1,402,337, 6.90% These yields are subject to change weekly. Please contact us to obtain the latest best rates. Guaranteed growth investment is especially attractive to high-income, conservative investors looking for guaranteed returns after tax. 3. RSA Retail Savings Bonds RSA Retail Savings Bonds is offered by the South Africa National Treasury, you lend money to the government and receive interest every 6 months. It offers 2, 3 and 5-year fixed rates as follows: 2 Year Fixed Rate 9.50% 3 Year Fixed Rate 9.75% 5 Year Fixed Rate 11.50% Minimum investment is R1,000. You can invest up to R5,000,000 in RSA Retail Savings Bonds. Persons over the age of 60 can receive their interest payments monthly. For more information on RSA Retail Savings Bonds, visit official website https://www.rsaretailbonds.gov.za/home.aspx. If you would like to speak to an advisor about investment options, email service@daberistic.com with your details. Africa presents many trade and investment opportunities. With 54 countries, 8 territories and 1.3 billion people, Africa is the world's second-largest and second-most populous continent, after Asia in both cases. South Africa, at the southernmost tip of Africa, naturally has access to the rest of African markets. How can we as South Africans take advantages of intra-Africa trade? What are the pitfalls? What is the status of the African Continental Free Trade Area agreement (AFCFTA)? I had the pleasure of interviewing Ronny Mkhwanazi, a Corporate and Trade Lawyer specialising in Intra-Africa Trade. Watch the video below as we unpacked the opportunities, legal framework and strategies for accessing various African countries. The presentation slides is available for download here |
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January 2025
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