Momentum Medical Scheme is in a strong growth position despite a stagnant market, according to Momentum Health Solutions executive Damian McHugh.
This as health-care costs were getting back to some sort of normalcy in different categories post-Covid-19, while in others they were not.
Speaking at the Momentum Health Solutions Financial Update webinar held this week, he said that they would have liked more growth, but they were taking into context where the market actually found itself.
“We have been able to do that growth while keeping the average age of our beneficiaries at one of the youngest of the large open schemes and retaining the right profile.
“Having solutions that make sense for this consumer coming into the job market is critical for the sustainability of any medical scheme into the future, because we know the clearest indication of future health-care costs is the average age of the pool of your members today,” McHugh said.
Momentum said its claims ratio was one of the lowest. However, it noted that claims ratios of various schemes were fluctuating.
“Yet, the solvency of Momentum Medical Health Scheme is still really well established, strong and in a great position. It has been able to do that while at the same time giving meaningful increases back and utilising the solvency to be relevant to a consumer based upon what they are experiencing with salary changes and fluctuations in the marketplaces in which they work.”
While this was a really strong set of results for 2021, the scheme said it would not highlight any changes in premium increases or benefits this year, which would only be dealt with in September.
The scheme said that Covid-19 had fundamentally changed the way in which health care was experienced as the pandemic had had a devastating effect.
“The demands on our health-care delivery system on our front line workers was significant. Citizens also experienced the losses of loved ones and colleagues,” McHugh said
“The ability for us to start understanding what that means in society, both as people and medical schemes, is really important. How we utilise premium, solvency, benefit and how we change them to be more relevant becomes so much more important as we understand what the future of our health care industry looks like and the future of the industry that we want it to look like is also important.
“How we shape this health care industry we want is also important considering National Health Insurance, destabilisation of currencies and things through war and all those kinds of things,” he said.
The ability of schemes to get better rates of return in investment strategies when investment markets were in a state of flux became quite difficult because there were a lot of moving parts, he said.
“We need to work out how we get those equilibriums in the right way to ensure that our schemes and people using them and insurance solutions are getting solutions that make the most sense.”
McHugh said that no matter by whichever measure one looked at it, the combination or even some of its individual elements were doing well.
He said the Board and the scheme’s management had worked to ensure they remained financially relevant to the consumers they were looking after. They had been able to keep prices in a more realistic space, but also keep the sustainability of the scheme in a very strong position in the destabilisation of their equilibrium through the pandemic.
McHugh said that he believed there would be more mergers in the industry because they were seeing the growth in the industry slowing down.
“As we know, as the growth in the medical scheme industry slow down, the age profiles get older and as that happens claims ratios jump up and you cannot increase by enough. It is important that if you are a scheme that needs a merge partner, make sure that you get the balance right. Merging two old schemes together does not make them young and might accelerate the demise of both those schemes.”
The executive said that Covid-19 had impacted schemes differently because of the way it impacted older people versus younger people. Schemes with higher average ages had experienced Covid costs in a more accelerated way than schemes with younger profiles.
“Covid has heightened the need for health care in a South African context. We have seen that within the Health4Me health solutions set even with the challenges in the economy because people realised the value of good quality health care,” McHugh said.
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