According to the 2020 Global Medical Trend Rates Report released by Aon, employer-provided medical benefit costs in South Africa are forecast to rise by 10 percent in 2020, outpacing the annual general inflation rate by 4.6 percent.
“The Medical Trend rate in South Africa for 2020 is expected to be slightly lower than the previous year, however, the medical trend rate levels in both nominal and real terms continue to be extremely high, and we do not expect to see a different path anytime soon. The increase in VAT taxes has already been fully assimilated by the SA market and we will continue to see carriers working to contain costs by extending network arrangements to direct utilisation to more managed care interventions. The supply and demand-side elements of utilisation have increased due to the ageing population of medical schemes as well as the increased incidence of chronic disease. Therefore, increased utilisation remains the major cost driver. A medical scheme with an ageing member base is expected to have a 2-3 percent increase in claims for every year that the average age increases. The need to grow or maintain solvency levels and the lingering ageing of the population will continue to pressure the market to keep medical trend rates at a high level,” according to Gavin Griffin, Aon’s Executive Head for Employee Benefits.
Aon’s report confirms the increasing impact of non-communicable diseases on health care costs globally. In South Africa, high blood pressure, diabetes, gynaecological/maternity, cancer and ENT/lung/respiratory disorders were the most prevalent health conditions driving health care claims. The report also confirms the growing prevalence of risks from unhealthy personal habits in South Africa, such as high blood pressure, high cholesterol, high blood glucose, lack of health screening and physical inactivity. Mental health prevalence is on the increase and is becoming a key focus for many employers.
Click here to download the report.
