Focus on average contribution increase

 

Below is information about the average contribution increase.

The Momentum Medical Scheme has announced a weighted average contribution increase of 9.4% for the year 2025, which will come into effect on January 1, 2025. Alongside this increase, there will be some enhancements to the benefits offered by the scheme. It is essential to understand that the contribution increases are not uniform; they vary depending on the specific option selected by members and the healthcare providers they choose to work with.

Members have the opportunity to customize their contribution increases by utilizing features such as provider choice. This strategic approach not only positively influences the amount members will pay in contributions but also helps ensure that the coverage aligns more closely with their individual healthcare needs. Below is a detailed breakdown of the factors contributing to the average increase:

1. Consumer Price Inflation (CPI) is 5.3% The Consumer Price Index serves as the baseline for calculating year-on-year contribution increases. For 2025, the anticipated CPI stands at 5.3%. In recent years, medical inflation has been projected to be CPI plus an additional 3%. This projection takes into account various demographic factors, such as adverse selection and the burden of disease, alongside supply-side considerations, which encompass advancements in medical technology and negotiated tariff increases with healthcare providers. All these elements play a crucial role in determining the necessary increases for the medical scheme in the upcoming year.

2. Impact of medical inflation, including new medical technology is 0.7% The expected increases resulting from provider negotiations contribute an additional 0.2% to the overall increase. Furthermore, the introduction of new medical technologies adds another 0.5%. Consequently, these supply-side factors exert a total additional strain of 0.7% on the Scheme’s overall contribution increase for 2025.

3. Demographic profile change and burden of diseases changes is 2.6% It is important to recognize that, regardless of other factors, a medical scheme's membership naturally ages by one year each year. This aging process is associated with a heightened burden of disease. To mitigate the impact of an aging membership, medical schemes must focus on expanding their membership base by attracting younger individuals annually.

4. Benefit changes and other is 0.6% Adjustments made to benefits and other related changes have resulted in an increase in claims costs by an additional 0.6%. These enhancements aim to ensure that members receive the best possible coverage and support for their healthcare needs.

5. Reserve building is 0.2% As of 2024, the Momentum Medical Scheme has maintained a solvency level that exceeds the mandated requirement of 25%. This achievement is attributed to a combination of lower claims experiences in previous years and favorable investment performance. Reserves serve as a protective buffer for members against unforeseen events. A portion of these reserves is allocated to help manage contribution increases, allowing for a more gradual adjustment while still ensuring that the scheme remains comfortably above the legal requirements and has adequate provisions for any unexpected future circumstances.

The total 2025 average effective increase is 9.4%.