06 October 2015: Low benefit contribution increases, strong solvency levels, rich day-to-day benefits and a new Low Cost Benefit Option in the works all signal a positive growth trajectory in 2016 for the self-administered scheme, SAMWUMED.
According to Neil Nair, Principal Officer of SAMWUMED, the restricted scheme, which caters for municipal and local government workers, has continued to improve its healthcare coverage offering to its members as well as improve the service that that it provides to them.
Looking at the year ahead, SAMWUMED is pleased to announce that its average weighted benefit increase for 2016 will be 5.5%. Nair explains that the scheme has tried to keep contribution increases as low as possible for current and potential members, especially with the current healthcare cost inflation which is approximately 3-4% higher than CPI.
The contribution increase for the scheme’s two benefit options, Option A and Option B, is 5.5% for both.
“The low benefit contribution increase was largely due to the positive results that the scheme had achieved in 2014 and anticipated in 2015,” points out Nair. “The scheme has been incredibly prudent with its spending, management of scheme risk and keeping non-healthcare costs as low as possible.”
Nair says that the scheme’s positive results has also lead to an expected increase of its solvency ratio to 78% at the end of 2015, increasing from 68.1% at the end of 2014.
SAMWUMED has maintained the belief that by providing simple and yet comprehensive benefit options to its members, which have rich day-to-day benefits without a savings portion that ultimately means that the benefits and healthcare coverage is funded directly from the risk pool and not the additional burden to members by means of a double contribution.
Nair explains that within the value chain of healthcare, primary and preventative care plays a critical role. “Through it, the Scheme is able to better co-ordinate patient care, provide better management of chronic diseases and offer a wider spectrum of health services. These include, preventative care, such as cancer screenings; chronic care for conditions like asthma, hypertension and diabetes; and acute care for symptoms like stomach pains, cuts or high fevers. Whilst these programmes are still at an inception level our plan is to grow these into meaningful vehicles for better management of dread disease. More often than not misdiagnosis leads to costly and indeed risky outcomes for the patient”
“Prevention is always better than the cure and, through primary and preventative care, the scheme is able to easily detect patterns in a member’s health and recommend lifestyle changes to prevent future complications requiring expensive specialty care,” he adds.
In keeping with the theme of providing strong primary and preventative healthcare benefits, Nair says that the Scheme shall be submitting a proposal to the Council for Medical Schemes (CMS) for a Low Contribution Benefit Option (LCBO) to be introduced into the SAMWUMED stable in 2016.
SAMWUMED is excited about the new Low Contribution Benefit Option and will be launching, subject to approval by the CMS, by the second quarter of 2016.
A key challenge to the LCBO in local government is the tax threshold for eligibility as prescribed by CMS – whilst SAMWUMED supports the principle of a threshold to prevent buy-downs. SAMWUMED would be submitting an application to up this limit to allow more low income workers to be eligible for this benefit.
The SAMWUMED LCBO proposal will be offering excellent benefits at a low cost for these new entrants into medical aid. The Scheme expects that it will exceed the CMS minimum requirements.
“We believe that once this is approved by the Council, we will be able to further widen the coverage to potential members with an option that provides affordable benefits, with a strong focus on primary and preventative healthcare,” says Nair.
SAMWUMED is a self-administered medical scheme that fully complies with all criteria prescribed by the Medical Schemes Act. SAMWUMED has been in existence since 1952. It was introduced by the Union (Cape Town Municipal Workers Association), predecessor to SAMWU (South African Municipal Workers Union), to cater for the health requirements of all local municipality and related agency workers. Initially set-up as an industrial council type benefit fund, SAMWUMED has grown and transformed itself into a self-funded medical aid scheme, registered in terms of the Medical Schemes Act.
SAMWUMED currently covers more than 92,000 lives under its administration.
For more information visit www.samwumed.org