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CMS Quarterly report shows interesting trends during peak of pandemic

The Council for Medical Schemes (CMS) has just published its quarterly report for the period ended 30 September 2020. Tasked with monitoring the financial performance and soundness of medical schemes, the CMS publishes comparative figures on a quarterly basis.

Here are some of the key trends:

Accumulated funds and solvency levels

The overall industry average solvency level increased from the audited solvency level of 35.6% at 31 December 2019 to 42.1% at 30 September 2020, an increase of 18.4%. This after an initial decline in the previous quarter when the solvency level was only 31.7% on 31 March 2020.

The total reserves per Regulation 29 for all medical schemes amounted to R 92.8 billion at 30 September 2020, which was 26.6% higher than the reserves of R 73.3 billion as at 31 December 2019 (R 70.1 billion at 31 March 2020).

The solvency level at 30 September 2020 of 42.1% was 23.9% higher than the budgeted solvency level of 34.0% for the same period and therefore much higher than the required minimum level of 25.0%, as per Regulation 29(1) of the Medical Schemes Act 131 of 1998, for both open and restricted schemes.

The report further indicates that registered medical schemes reported a net healthcare surplus (before taking investment and other income into account) of R 17. 0 billion compared to a budgeted net healthcare deficit of -R 2.6 billion at 30 September 2020.  In the same manner, open schemes also reported a net healthcare surplus (before taking investment and other income into account) of R10.7 billion compared to a budgeted deficit of R 1.2 billion, whereas restricted schemes realised a net healthcare surplus of R 6.3 billion compared to a budgeted deficit of -R 1.4 billion.

Click here to download the CMS Quarterly report that details membership, age distribution and pensioner ratio, as well as statistics on contributions and relevant healthcare expenditure.

The latest report is based on stats amid the Covid pandemic. The assumption a few months ago was that this quarter’s report will show a huge impact on healthcare costs and expenditure. On the contrary, funds reported a surplus and healthcare cost per beneficiary further decreased. It will be most interesting to see the impact of Covid admissions during the second wave in the next quarter or two.

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