Medical Aid Giant Has Ailments Of Its Own |
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June 25 - South African health insurance titan, Discovery Health, is still operating its medical scheme at insufficient solvency levels that are below industry requirements based on their annual report for 2006, the results of which were recently released to the public. This news will come as a surprise to many South Africans who switched to Discovery's medical aid, preferring the many innovations and perks to the more staid offerings of their competitors. But there is evidently a high operating cost that is part of the bargain, and the scheme itself has a margin that is currently below the solvency requirement of the Council For Medical Schemes. 25% is the magic proportion that the council imposes as the minimum level of solvency for a health scheme, and the SA average hovers around the 29% mark. But the Discovery Health Medical Scheme weighed in at only 18.09%. The operating costs of the medical scheme are simply too high and of particular concern are the administration fees that the scheme pays back to Discovery Health. Those fees make up a whopping 11% of all the contribution income paid into the scheme. Some closed schemes are able to operate with only 7% of that income going to the administrators. The shareholders of Discovery Health are smiling right now, but the scheme has had to promise the powers that be that they will achieve that solvency level by the end of 2008. A new business plan, that hopefully includes cutbacks on administrative pocket lining will ensure that those targets are met. Related Insurance Articles: * AIDS Insurance A Moneyspinner In SA * New Home Insurance Policy For Landlords * South African Crime Statistics Cause Concern * Rising Power Outages Impact SA Insurance * Interest Rate Hikes Impact On Home Insurance * Car Insurance Scams In South Africa Exposed * SA Insurance Study Shows Dialling Direct Is The Future * Old Mutual Posts Strong First Quarter Results 
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| 3/14/2010 7:05:32 AM | |||||||||||||||||||||
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