Old Mutual Praises Private Medical Schemes

March 4 - Old Mutual said this week that the government's praise of the private insurance sector was a welcome step and shows that private medical schemes can play an important role in the country in the short to medium term.

The Healthcare Consulting Manager for Old Mutual Actuaries, Margaret Hulme, was referring to the Finance Minister's recent comments concerning the role of private medical schemes as the country embarks on plans to introduce a National Health Insurance scheme.

"While Pravin Gordhan, Finance Minister, alluded to the government's intentions to introduce a National Health Insurance (NHI) system in his recent budget address, private medical schemes will draw comfort from his remarks highlighting the need for the private sector to be retained alongside the public system," said Hulme.

She also said that this was a positive indication of the role that private medical schemes can play in South Africa, if only in the short term.

Hulme also referred to the fact that the REF for private schemes were noted in the government's budget review.

"This is highly encouraging, as the proposed introduction of NHI had appeared to bring the much needed structural changes to the medical schemes environment to a halt," she said.

Turning to premium prices for private medical insurance schemes, Hulme said that from March this year, the tax deductible portion of contributions per month to schemes for members under the age of 65 had climbed to 7.2% for the first two beneficiaries.

Thereafter, the increase was 7.9% for any subsequent beneficiaries (from R380 to R410).

She noted that the government recognized the need for public and private insurance sectors to work together if the NHI had any chance of working.

She also said that the affordability of such a scheme was still in question.