Medical aid membership on the rise as amalgamations shrink the number of schemes

Between 2000 and 2021, the number of medical schemes halved from 144 to 73. This was driven by two factors: the difficulty sustaining smaller schemes and the significant amount of management time needed for an employer-based restricted scheme. However, over the same period, there was a 60% growth in principal members (1.5 million more) and a 36% growth in beneficiaries (2.4 million more).

Paresh Prema, Alexforbes’ branch head: actuarial and technical advisory services, says that by the end of 2021, principal membership grew by 0.84%.

“It is important to point out that this increase in membership followed a decline of 1.56% in 2020. Similarly, the number of beneficiaries increased by 0.5% in 2021 compared to a decline of 1.15% in 2020,” he says.

The increase in membership in the 2021 financial year can be attributed to two of the largest schemes in the industry – Discovery Health Medical Scheme and the Government Employees Medical Scheme (Gems) – which grew by 22,499 and 22,578 principal members respectively. By the end of 2021, Discovery’s market share was 33% while Gems’ market share was 19%.

The bad news is that there is a concerning trend where the proportion of older members has increased over the past 16 years, while the proportion of younger members has decreased.

Prema points out that for medical schemes to remain affordable and accessible, they need a balance of membership at all ages. He warns that medical schemes need to take steps to ensure that medical scheme coverage remains affordable and accessible to younger members in order to manage claims.

CompCare was the oldest scheme, with an average beneficiary age of 42.2, while Polmed remains the youngest scheme with an average beneficiary age of 28.6.

Solvency ratio of schemes