Centre for
Actuarial
Research
The Impact of PMBs
on Affordability
January 2003
Approach to Affordability



Compare price of components of PMB package to reported
benefits and contributions of medical schemes.
 Industry level
 Scheme level
 Option level
Compare price of PMB package to published contribution
tables for open scheme options. Focus on low-cost options.
Compare price of PMB package to income levels of existing
members and potential members of medical schemes.
Impact of employer and per capita subsidies.
Centre for
Actuarial
Research
Price of the PMB
Package
Centre for
Actuarial
Research
Cluster Analysis


Different clusters experience different benefit utilisation,
costs and disease profiles. Provider behaviour differs by
cluster, even within the same hospital facility.
Four distinct clusters:
 High contains options with older, 'whiter' members with
high utilisation;
 Medium-older contains options with medium utilisation
and older members;
 Medium-younger contains options with medium
utilisation and younger members; and
 Low contains options with younger, 'blacker' members
with low utilisation.
Centre for
Actuarial
Research
Cluster Analysis
8.8%
High
9.6%
Medium-older
Medium-younger
Low
10.1%
71.6%
Centre for
Actuarial
Research
Cluster Analysis




Study contains more Low cluster beneficiaries than the
industry.
For industry comparisons, use Weighted industry price.
 This uses 50% of the costs of the Low cluster and
100% of the other clusters.
Low cluster is more relevant to the emerging low-cost
option environment.
High cluster is used to give an upper limit to the PMB
price. Would only be applicable to a few high utilisation
options.
Centre for
Actuarial
Research
Price of Inpatient and Outpatient
Package
Non-healthcare costs
Outpatient package
Uncertainty in PMB definition
Inpatient PMB package
R 2,500
Per Beneficiary Per Annum
R 2,250
R 2,000
R 1,750
R 1,500
R 1,250
R 1,000
R 750
R 500
R 250
R0
High
Medium- Medium- High and
older
Younger Medium
Low
Total
Study
Weighted
Total
Centre for
Actuarial
Research
Price of CDL Package
R 1,500
Non-healthcare costs
Per Beneficiary Per Annum
Medical management est.
Uncertainty in CDL
R 1,250
CDL Medicine Package
R 1,000
R 750
R 500
R 250
R0
High
Medium- Medium- High and
older Younger Medium
Low
Additional
Total
Study
Weighted
Total
Centre for
Actuarial
Research
Price of Complete PMB Package
Non-healthcare costs
CDL Medicine Package
Ambulatory PMB package
Inpatient PMB package
R 4,000
Per Beneficiary Per Annum
R 3,500
R 3,000
R 2,500
R 2,000
R 1,500
R 1,000
R 500
R0
High
Medium- Medium- High and
older
Younger Medium
Low
Total
Study
Weighted
Total
Centre for
Actuarial
Research
Private Sector PMB Package
per beneficiary per annum
Price pbpa in 2001 Rand
terms
Inpatient PMB package
Ambulatory PMB package
CDL Medicine Package
Non-healthcare costs
Complete PMB package
Private Sector
High and
Medium
Low
R 1,994.95
R 1,591.46
R 867.47
R 1,073.31
R 1,188.01
R 477.24
R 416.72
R 308.12
R 339.00
R 356.20
R 1,154.35
R 805.33
R 286.33
R 421.58
R 499.09
R 170.96
R 141.97
R 89.55
R 104.82
R 113.47
R 3,797.50
R 2,955.48
R 1,551.47
R 1,938.71
R 2,156.78
High
Total Study
Weighted
Industry
Centre for
Actuarial
Research
Non-Healthcare Expenditure
on PMB Package
Non-healthcare
Expenditure as a
Proportion of …
High
Mediumolder
MediumYounger
High and
Medium
Low
Total
Study
Weighted
Total
Total Inpatient package
3.9%
4.0%
5.0%
4.3%
5.4%
4.9%
4.7%
Total Outpatient package
2.3%
2.3%
2.7%
2.4%
2.7%
2.6%
2.5%
Total CDL package
5.9%
6.8%
6.8%
6.4%
7.8%
7.3%
7.2%
Complete PMB package
4.5%
4.7%
5.4%
4.8%
5.8%
5.4%
5.3%
Well below Registrar’s benchmark of
10% of total expenditure
Centre for
Actuarial
Research
Public Sector Complete PMB
Package
Private sector cost
Total CDL package
Total Outpatient package
Total Inpatient package
R 4,000
Per Beneficiary Per Annum
R 3,500
R 3,000
R 2,500
R 2,000
R 1,500
R 1,000
R 500
R0
High
Medium- Medium- High and
older
Younger Medium
Low
Total
Study
Weighted
Total
Centre for
Actuarial
Research
Public Sector PMB Package
per beneficiary per annum
Price pbpa in 2001 Rand
terms
High and
Medium
Low
R 1,465.44
R 1,173.53
R 648.89
R 798.05
R 881.17
Total Outpatient package
R 251.27
R 207.78
R 129.64
R 151.85
R 164.23
Total CDL package
R 708.76
R 520.56
R 237.08
R 311.83
R 354.66
R 2,425.48
R 1,901.87
R 1,015.61
R 1,261.73
R 1,400.07
Total Inpatient package
Complete PMB package
Public Sector
High
Total Study
Weighted
Industry
Centre for
Actuarial
Research
Price of PMB Package by Age
12,000
Total CDL package
Total Outpatient package
10,000
Total Inpatient package
Complete PMB package
Public sector
6,000
4,000
2,000
All ages
Missing
85+
80-84
75-79
70-74
65-69
60-64
55-59
50-54
45-49
40-44
35-39
30-34
25-29
20-24
15-19
10-14
5-9
1-4
0
0
Price pbpa
8,000
Centre for
Actuarial
Research
Price of PMB Package by Age


Note that for all age bands over 40, the PMB price by age
exceeds the community-rated PMB price.
This explains the incentive open schemes have to attract
and retain younger and healthier members.
Centre for
Actuarial
Research
Complete PMB Package
for family of four per month
Price per family per month
(2001 Rands)
High
Total Inpatient package
R 556.37
R 466.84
R 291.98
R 345.27
R 373.29
R 98.28
R 84.98
R 59.00
R 66.93
R 71.09
Toal CDL package
R 338.95
R 259.47
R 138.33
R 176.00
R 195.94
Complete PMB package
Private Sector
R 993.59
R 811.28
R 489.31
R 588.19
R 640.33
Complete PMB package
Public Sector
R 638.26
R 525.01
R 321.15
R 383.75
R 416.76
Total Outpatient package
High and
Medium
Low
Total Study
Weighted
Industry
Centre for
Actuarial
Research
Affordability
Relative to Benefits
Centre for
Actuarial
Research
Beneficiaries 2001
Bargaining
Council
Schemes
3.8%
Restricted
Schemes
28.3%
Open Schemes
67.9%
Source : Registrar’s Returns 2001
Centre for
Actuarial
Research
Hospital Only
R 1,600
1,434
Per Beneficiary per Annum
R 1,400
1,375
1,339
1,253
R 1,200
R 1,000
854
R 800
624
R 600
R 400
Source : Registrar’s Returns 2001
All Registered
Schemes
Restricted
Schemes
Open Schemes
PMB High
Cluster
PMB Low
Cluster
R0
PMB Industry
Weighted
R 200
Centre for
Actuarial
Research
Hospital and Related
2,342
1,902
R 2,000
1,817
1,877
1,414
R 1,500
1,046
R 1,000
Source : Registrar’s Returns 2001
All Registered
Schemes
Restricted
Schemes
Open Schemes
PMB Low
Cluster
R0
PMB High
Cluster
R 500
PMB Industry
Weighted
Per Beneficiary per Annum
R 2,500
Centre for
Actuarial
Research
Medicine
Per Beneficiary per Annum
R 1,400
1,342
1,154
R 1,200
1,181
1,112
R 1,000
R 800
R 600
R 400
499
286
Source : Registrar’s Returns 2001
All Registered
Schemes
Restricted
Schemes
Open Schemes
PMB High
Cluster
PMB Low
Cluster
R0
PMB Industry
Weighted
R 200
Centre for
Actuarial
Research
Total Benefits
R 5,000
4,833
4,488
4,591
Per Beneficiary per Annum
R 4,500
R 4,000
3,627
R 3,500
R 3,000
R 2,500
2,043
R 2,000
1,462
R 1,500
R 1,000
Source : Registrar’s Returns 2001
All Registered
Schemes
Restricted
Schemes
Open Schemes
PMB High
Cluster
PMB Low
Cluster
R0
PMB Industry
Weighted
R 500
Centre for
Actuarial
Research
Affordability Relative
to Contributions
Centre for
Actuarial
Research
Total Contributions
Savings Contributions
Pooled Contributions
599
R 5,000
433
549
3,798
R 4,000
2,157
R 2,000
4,877
5,192
4,971
All Registered
Schemes
R 3,000
Restricted
Schemes
Per Beneficiary per Annum
R 6,000
1,551
Source : Registrar’s Returns 2001
Open Schemes
PMB High
Cluster
PMB Low
Cluster
R0
PMB Industry
Weighted
R 1,000
Centre for
Actuarial
Research
Non-Healthcare Expenditure 2001
Broker fees
5.4%
Managed Care
18.4%
Own facility cost
0.0%
Other
0.0%
Nett Reinsurance
6.2%
Bad debts
3.7%
Source : Registrar’s Returns 2001
Administration
66.2%
Centre for
Actuarial
Research
Real Non-Healthcare Expenditure
180
160
140
Real Rands pmpm (2001 Rands)
Bad debts
Other
Managed Care
Administration
Nett Reinsurance
Own facility cost
Broker fees
120
100
80
60
40
20
Year
Source : Registrar’s Returns
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1989
1988
1987
1986
1985
1984
1983
1982
1981
1980
1979
1978
1977
1976
1975
1974
0
Centre for
Actuarial
Research
Non-Healthcare Expenditure
R 1,000
921
Administration and Managed Care
169
R 800
786
110
R 700
R 600
501
5
R 500
752
676
R 300
Source : Registrar’s Returns 2001
Restricted
Schemes
R0
Open Schemes
113
-
496
171
-
PMB High
Cluster
R 100
90
-
PMB Industry
Weighted
R 200
All Registered
Schemes
R 400
PMB Low
Cluster
Per Beneficiary per Annum
R 900
Other Non-Healthcare
Centre for
Actuarial
Research
5,475
5,625
5,520
All Registered
Schemes
R 5,000
Private Sector
Public Sector
3,798
R 4,000
R 3,000
2,425
2,157
R 2,000
1,551
1,400
1,016
PMB Industry
Weighted
PMB Low
Cluster
R0
Source : Registrar’s Returns 2001
Open Schemes
R 1,000
PMB High
Cluster
Per Beneficiary per Annum
R 6,000
Restricted
Schemes
Public Sector
Centre for
Actuarial
Research
Bargaining Council
Schemes
Centre for
Actuarial
Research
Bargaining Council Schemes
R 1,200
PMB Low Cluster
1,046
Bargaining Council
schemes
Per Beneficiary per Annum
R 1,000
R 800
624
R 600
R 400
286
R 200
106
78
78
R0
Hospital only
Hospital plus related
Source : Registrar’s Returns 2001
Total Medicine
Centre for
Actuarial
Research
Bargaining Council Schemes
R 1,800
Per Beneficiary per Annum
R 1,600
PMB Low Cluster
1,551
Bargaining Council
schemes
1,462
R 1,400
R 1,200
1,016
R 1,000
R 800
R 600
412
471
471
R 400
R 200
R0
Total Benefits
Source : Registrar’s Returns 2001
Contributions
Public Sector
Centre for
Actuarial
Research
Exempt Scheme Benefits 2000
Total Benefits pbpm by Industry 2000
600
Bargaining Council Schemes reporting in 2001
Low cluster PMB contribution for public sector in 2001
500.7
500
Rands pbpm
400
335.0
300
219.6
205.1
200
157.4
93.5
100
84.6
75.6
34.3
22.7
14.1
0
Clothing
Industry
Building
Industry
Motor Industry
Hairdressing
Industry
Furniture
Industry
MEDCOR
Electrical
Overall Exempt
Industry (Cape)
Overall
Registered
Industry
Source : Registrar’s Returns 2000
Centre for
Actuarial
Research
Exempt Scheme Benefits 2000
Total Benefits pbpm by Scheme 2000
335
Overall Registered
205
Overall Exempt
501
M EDCOR
76
Electrical Industry (Cape)
10
Natal Furniture Wo rkers Sick B enefit So ciety
40
Furniture & A llied Wo rkers Sick B enefit So ciety(S.W.D.)
36
Natal Hairdressers Sick B enefit Fund
203
Hairmed
344
Scheme
M o to r Industry M edical A id Fund (M IM ED)
87
A uto wo rkers M edical A id Fund (A uto med)
East Lo ndo n B uilding Industry M edical A id Fund (ELB IM A F)
187
Clothing Industry
42
B uilding Industry M edical A id Fund (Western Cape)
Building Industry
128
B uilding Industry M edical A id Fund (Gauteng)
99
B uilding Industry M edical A id Fund (Eastern Cape)
Motor Industry
29
B uilding Industry M edical A id Fund (B lo emfo ntein)
MEDCOR
51
B argaining Co uncil fo r the B uilding Industry (Kimberly)
23
Knitting Industry M edical B enefit So ciety (No rthern A reas)
Hairdressing Industry
26
Clo thing Industry Sick B enefit Fund (Natal)
Furniture Industry
32
Clo thing Industry M edical B enefit So ciety (No rthern A reas)
26
Clo thing Industry M edical B enefit Scheme (FS & NC)
Electrical Industry
21
Clo thing Industry Health Care Fund (Cape To wn)
0
100
200
300
400
500
Rands pbpm
Low cluster PMB contribution for public sector in 2001
Source : Registrar’s Returns 2000
Centre for
Actuarial
Research
Impact on
Low-Cost Options
Centre for
Actuarial
Research
Options Available to Benchmark Family
Weighted industry PMB package for a family of four
Options
R 640.33 per month
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
Contributions per fam ily per m onth
Source : CARE Monograph
Centre for
Actuarial
Research
Primary Care Network Options
843
Fedsure Larona PrimeCure
638
Ingwe PrimeCure
728
Ingwe CareCross
966
Medihelp Nucleus
730
Medimed PrimeCure
824
Medimed ECIPA, UDIPA
657
Metropolitan Primary Plus
576
MSP/Sizwe PrimeCure
780
MSP/Sizwe Ecipamed
904
MSP/Sizwe MediCross
732
NMP PrimeCure
280
Protector Health Primary
480
Protector Health Primary Plus
841
Provia SilverCure
810
Spectramed Spectra Alliance
672
Topmed Bophelo Network
635
Vulamed Standard
321
Low cluster PMB Public Sector
489
Low cluster PMB Private Sector
0
100
200
300
400
500
600
700
800
900
1,000
Contribution per family per month
Source : CARE Monograph
Centre for
Actuarial
Research
Recommendations for
Low-Cost Option Design

Need contribution less than R500 for family of four earning
R4 000 per month.

Hospitalisation offered in differential amenities in a public
hospital.
Specialist services in a public hospital.
Chronic medicine offered either in the public hospital or
with a strict formulary by the primary care providers.
Primary care offered in private sector capitated networks.



Source : CARE Monograph
Centre for
Actuarial
Research
Affordability
Relative to Income
Centre for
Actuarial
Research
Income Levels Open Schemes
CMS Survey 2001
12.4%
31.7%
<2000
2001-3000
3001-4000
28.9%
4001-5000
>5000
14.7%
12.3%
Source : Council for Medical Schemes
Centre for
Actuarial
Research
Employment
Medical Scheme Beneficiaries
Unemployed
2.3%
Not economically
active
24.7%
Employed
44.0%
Missing or N/A
29.0%
Source : OHS 1999
Centre for
Actuarial
Research
Employment Profile
Medical Scheme Beneficiaries
800,000
700,000
600,000
500,000
Unemployed
Employed
Not economically active
Missing or N/A
400,000
300,000
200,000
100,000
Source : OHS 1999
(blank)
85+
80-84
75-79
70-74
65-69
60-64
55-59
50-54
45-49
40-45
35-39
30-34
25-29
20-24
15-19
10-14
5-9
1-4
0
-
Centre for
Actuarial
Research
Workers Profile
Medical Scheme Beneficiaries
800,000
700,000
600,000
500,000
Retired (Pensioner)
Permanently unable to work
Not working
Not working (but looking for work)
Going to school/college/university
Full time homemaker/housewife
N/A
400,000
300,000
200,000
100,000
Source : OHS 1999
(blank)
85+
80-84
75-79
70-74
65-69
60-64
55-59
50-54
45-49
40-45
35-39
30-34
25-29
20-24
15-19
10-14
5-9
1-4
0
-
Centre for
Actuarial
Research
Income Levels
Medical Scheme Beneficiaries
4.6%
3.7%
8.2%
R0
Don't know or missing
R1-R799
R800-R1 800
13.5%
47.1%
R1 800-R2 499
R2 500-R4 999
R5 000-R9 999
R10 000+
Refuse
5.0%
7.4%
5.0%
Source : OHS 1999
5.4%
Centre for
Actuarial
Research
Income Profile
Medical Scheme Beneficiaries
800,000
700,000
600,000
Refuse
R10 000+
R5 000-R9 999
R2 500-R4 999
R1 800-R2 499
R800-R1 800
R1-R799
Don't know or missing
R0
500,000
400,000
300,000
200,000
100,000
Source : OHS 1999
(blank)
85+
80-84
75-79
70-74
65-69
60-64
55-59
50-54
45-49
40-45
35-39
30-34
25-29
20-24
15-19
10-14
5-9
1-4
0
-
Centre for
Actuarial
Research
Income Proportion by Age
Medical Scheme Beneficiaries
100%
80%
Refuse
R10 000+
R5 000-R9 999
R2 500-R4 999
R1 800-R2 499
R800-R1 800
R1-R799
Don't know or missing
R0
60%
40%
20%
Source : OHS 1999
(blank)
85+
80-84
75-79
70-74
65-69
60-64
55-59
50-54
45-49
40-45
35-39
30-34
25-29
20-24
15-19
10-14
5-9
1-4
0
0%
Centre for
Actuarial
Research
Income Profile
All Citizens
100%
90%
80%
70%
60%
Public Sector
Not known
Medical Scheme
50%
40%
30%
20%
Source : OHS 1999
Not given
Refuse
R10 000+
R5 000-R9 999
R2 500-R4 999
R1 800-R2 499
R800-R1 800
R0
0%
R1-R799
10%
Centre for
Actuarial
Research
Possible SHI Income Earners
3,500,000
3,000,000
2,500,000
Part of a medical scheme
2,000,000
Potential
Potential SHI
Part of
a medical scheme
Public
Sector
1,500,000
1,000,000
500,000
Source : OHS 1999
Don't know or missing
Refuse
R10 000+
R5 000-R9 999
R2 500-R4 999
R1 800-R2 499
R800-R1 800
R1-R799
R0
0
Centre for
Actuarial
Research
Affordability Issues
for Pensioners
Centre for
Actuarial
Research
Vulnerability of Pensioners
100,000
90,000
80,000
70,000
Refuse
R10 000+
R5 000-R9 999
R2 500-R4 999
R1 800-R2 499
R800-R1 800
R1-R799
Don't know or missing
R0
60,000
50,000
40,000
30,000
20,000
10,000
Source : OHS 1999
(blank)
85+
80-84
75-79
70-74
65-69
60-64
55-59
50-54
45-49
40-45
35-39
30-34
25-29
20-24
15-19
10-14
5-9
1-4
0
-
Centre for
Actuarial
Research
Vulnerability of Pensioners
Not in Medical Schemes
550,000
500,000
450,000
400,000
Refuse
R10 000+
R5 000-R9 999
R2 500-R4 999
R1 800-R2 499
R800-R1 800
R1-R799
Don't know or missing
R0
350,000
300,000
250,000
200,000
150,000
100,000
50,000
Source : OHS 1999
(blank)
85+
80-84
75-79
70-74
65-69
60-64
55-59
50-54
45-49
40-45
35-39
30-34
25-29
20-24
15-19
10-14
5-9
1-4
0
-
Centre for
Actuarial
Research
Vulnerability of the Disabled
7,000
6,000
5,000
Refuse
R5 000-R9 999
R2 500-R4 999
R1 800-R2 499
R800-R1 800
R1-R799
Don't know or missing
R0
4,000
3,000
2,000
1,000
Source : OHS 1999
(blank)
85+
80-84
75-79
70-74
65-69
60-64
55-59
50-54
45-49
40-45
35-39
30-34
25-29
20-24
15-19
10-14
5-9
1-4
0
-
Centre for
Actuarial
Research
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
Rands pmpm
Real Contributions
1200
1100
1000
900
800
700
600
500
400
300
200
100
0
Year
Source : Registrar’s Returns
Centre for
Actuarial
Research
Future Pensioner Philosophy
43%
Do Not Offer Benefits
to New Employees
60%
26%
Cap Company
Contribution
16%
15%
Cash or Benefits in
lieu of Medical
Cap Benefits
6%
12%
1%
1999
2001
4%
7%
Eligibility Criteria
Changed
0%
10%
20%
Source : OMHC Health Survey 2001
30%
40%
50%
60%
Centre for
Actuarial
Research
Conclusions
Centre for
Actuarial
Research
Conclusions on Affordability



Comparing actual benefit expenditure and contributions to
PMB package: at industry level, PMB package was well
covered.
There should thus be no upward pressure on contributions
from Prescribed Minimum Benefits.
Comparing published options prices to PMB package:
showed conclusively that the current packages on offer by
open schemes were way in excess of the price of the PMB
package for the industry. In some cases the prices were
four or five times the price of the PMB package.
Centre for
Actuarial
Research
Conclusions on Affordability


The conclusion must be that there is substantial room to
reduce the current benefit offerings in the industry to
something closer to the price of the PMB package plus an
additional amount for routine primary care.
The industry needs to critically examine benefit offerings
for 2004 and begin the designs with a focus on the PMB
package.
Centre for
Actuarial
Research
Further Research on Affordability





Calculate price of PMB package for each scheme using
age profile of that scheme. Compare to community-rated
price of PMB package.
Compare price of PMB package to disposable income of
households.
Maximum proportion of income to be spent on healthcare.
More information on employer subsidy policy.
Impact of per capita subsidy, once shape of subsidy
finalised.
Centre for
Actuarial
Research
Policy Issues
Centre for
Actuarial
Research
Understanding of PMBs




It has become apparent during this research that the
introduction of Prescribed Minimum Benefits with effect
from 1 January 2000 has barely impacted the industry.
Very few schemes are able to isolate PMB expenditure
from other benefits.
Of even greater concern is how few medical practitioners
seem to have heard of PMBs. Thus at the critical interface
with patients there is little knowledge of the rights of
medical scheme beneficiaries to treatment for the PMB
conditions.
It is certainly not in the interests of schemes to educate
practitioners and this critical role must be taken on
centrally by the Department of Health or the Council for
Medical Schemes.
Centre for
Actuarial
Research
Community-rated PMB Price



The comparison of options prices in open schemes for the
benchmark family shows a wide divergence of prices.
Members should be facing a common community-rated
price for the PMB package and not a price determined by
each scheme according to its own demographic profile
and illness burden.
Now that a price has been conclusively determined for the
PMB package for the industry, this can facilitate work on a
risk equalisation mechanism between schemes that
covers the benefits in the PMB package.
Centre for
Actuarial
Research
Vulnerability of Pensioners



From the study findings, it is evident that pensioners are
already vulnerable and that they will increasingly find
contributions to medical schemes difficult to afford, given
that medical contribution increases have exceed pension
increases.
Added to this is the changing structure of employee
benefits in such a way that future pensioners will be
unlikely to have a subsidy for medical benefits in
retirement.
The study describes the subsidy issue as a future time
bomb and this issue needs to be placed on the agenda
now.
Centre for
Actuarial
Research
Impact of Per Capita Subsidy
Single Adult
No subsidy
Family of Four
R 800 pa R1 000 pa
R 800 pa R1 000 pa
No subsidy
subsidy
subsidy
subsidy
subsidy
Complete PMB Package Price
pmpm in 2001
R 124.26
R 57.59
R 40.93
R 321.15
R 54.48
-R 12.18
Effective price to the member
R 124.26
R 57.59
R 40.93
R 321.15
R 54.48
R 0.00
0.5%
0.6%
1.3%
2.3%
3.7%
12.2%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
Monthly Income Bands
OHS99
More than R10 000
R5 000 to R9 999
R2 500 to R4 999
R1 800 to R2 499
R 800 to R1 800
R 1 to R 799
Proportion of Income
1.1%
1.5%
3.0%
5.2%
8.6%
27.8%
0.5%
0.7%
1.4%
2.4%
4.0%
12.9%
0.4%
0.5%
1.0%
1.7%
2.8%
9.2%
2.9%
3.8%
7.7%
13.4%
22.1%
71.8%
Centre for
Actuarial
Research
Per-capita Subsidy




The study also attempts to put into context the per capita
subsidy mooted in the Taylor Committee report.
It was demonstrated that this subsidy could have
enormous impact on the affordability of healthcare for lowincome families.
This impact is subject to the final amount of the subsidy
and the exact form it will take.
There is no doubt that a subsidy of this nature has a farreaching impact on affordability of the PMB package for
low-income groups and clarity on proposals is now
needed.
Centre for
Actuarial
Research
Public Sector Contracting



The price of the PMB package in the public sector, which
lies at the heart of affordability for the low-cost options and
the Bargaining Council schemes, now needs further work
by the public sector itself.
Medical schemes need to know at what price they can
contract for the delivery of benefits in the public sector and
these contracts need to be facilitated at a national level.
The impact of this additional substantial network to the
current hospital networks offered by the private sector
should have a galvanising effect on hospital benefit
negotiations for 2004.
Centre for
Actuarial
Research
Total Expenditure on
Prescribed Minimum Benefits




To put the size of the business in context, total expenditure
on the PMB package using the Weighted industry price
would have been R 14.573 billion in 2001.
The estimated price for delivery of the package in the
public sector would have been R 9.460 billion.
This covers only registered schemes.
A further amount of R 0.268 billion would be added to the
public sector total for those Bargaining Council schemes
reporting in 2001.
Centre for
Actuarial
Research
Centre for Actuarial Research
(CARE)
A Research Unit of the University of Cape Town
A Research Report Prepared
Under Contract for the
Council for Medical Schemes
Centre for
Actuarial
Research