Office of the Principal Officer

77 Twickenham Avenue, Auckland Park 2006

Private bag X1 Auckland Park 2092 Gauteng South Africa.
Tel +27 11 482-1383 Fax +27 11 482-1169
anthony@fundsadmin.co.za

3 January 2020
Open letter to all Members
SABC Medical Scheme

Dear Member

BENEFITS AND CONTRIBUTIONS: 2020

Your Medical Scheme Guide for 2020 is attached.

Road shows took place throughout the country during the latter part of 2019 to explain certain aspects of the Benefit Guide, as well
as the benefit structure and contributions for 2020. If you couldn’t attend, kindly read the brochure and contents of this letter
carefully, which should clarify most issues. Your Client Liaison Consultant will also be more than happy to explain anything which
might be unclear to you.

I would like to comment on the key changes for this year for your information:

INCREASE IN CONTRIBUTIONS

• The Scheme continues to maintain a healthy solvency ratio, approximating 69% at the end of December 2019 (the
Medical Schemes Act (1998 as amended) requires schemes to hold a minimum solvency level of 25%), and was expected
to close the year with an operating deficit for the year (before investment and other income) of approximately R11 million.

• Data from medical aid companies indicates that the industry generally follows the guideline of CPI+3% when determining
price increases every year. CPI for 2020 is expected to be 5.1% (SARB forecast July 2019).

• According to Consulting firm Aon, employer-provided medical benefit costs in SA are expected to rise by 10% in
2020. Due to the ageing population of medical schemes as well as the increased incidence of chronic diseases, members
are using their scheme benefits more than ever, which is driving up the cost of cover.

• You will thus be pleased to note that the Scheme contribution increase of 7,5% for 2020 remains low in the current
climate and compares more than favourably to that of other medical aid schemes in South Africa. The
contribution rate is calculated to ensure the continued sustainability of the Scheme in an environment which is
continuously hampered by increasing costs.

• Provision has been made for:

➢ the expected rising medical claims inflation rate expected for 2020, based on the average medicine, specialist and
doctor tariff increases as well as the expected hospital tariff increases

➢ increases in the utilization by members of the benefits offered, expected due to the average age of members
increasing as is to be expected, as well as the cost of new technology and rising medicine costs

➢ the need to maintain the solvency level of the Scheme at a healthy level.

• At the time of this communication, the following weighted average increases for other Schemes had been announced for
2020:

Average
Scheme
Increase 2019
Fedhealth 10,6%
Bestmed 8,9%
Discovery 9,5%
Bonitas 9,9%
Medihelp 11,9%
Momentum 8,2%
Medshield 9,9%
SABC 7,5%

The trustees and consultants once more need to be commended on their efforts during the year in the management of costs, the
monitoring of health-care expenditure and their finely-tuned investment decisions which made such a low increase possible, whilst
still sustaining the viability and solvency level of the Scheme.

SABC Medical Scheme

Principal Officer Mr Anthony Williams
 SABC MEDICAL SCHEME 2020 Page |2

IMPROVEMENTS IN BENEFITS

One of the advantages of belonging to a closed medical aid scheme where the trustees represent the employer and the members
is that they have an ear to the ground where the needs of the members are concerned. There is always good news surrounding
benefit design. Significant aspects of your benefits for 2020 are as follows:

• Benefit increases which are more generous than the inflation rate:
➢ The Overall Annual Benefit limit has been increased to R1,154 million per family
➢ Limit for tariff rates for dental procedures done in rooms increased by 10% (hospital gap cover on the dental
benefit remains unchanged at 150%)
➢ Continuation of Childhood Support Therapies for childhood conditions introduced in 2019 - the Scheme will fund
R62,700 per beneficiary per annum, dedicated to funding Physiotherapy, Occupational Therapy and Speech
Therapy costs which will not affect your Savings/Day to Day benefits (You will need to apply for this benefit with
proper motivation). This is applicable to children up to the age of 18 years.

• Changes in benefits enabling Scheme to maintain a low contribution increase:

There were no decreases in benefits for 2020. In addition, it should be noted that where a member’s benefits are depleted,
the Scheme considers ex-gratia applications in deserving cases.

• All other benefits have been increased by a minimum of 4,5%.

• Dentistry - The Scheme has a very generous allowance for osseo-integrated implants and orthognathic surgery of
R18,450 per beneficiary, funded from the major risk pool (and not savings). Please note that basic and advanced dentistry
are also funded from the Overall Annual Limit, with a sub-limit of R7,610 per beneficiary.

• Oncology, maternity and specialized dentistry benefits, amongst others, have all been increased, while the Aid for Aids
program for HIV affected beneficiaries continues to provide superior benefits with strictly guarded patient anonymity.

• The Wellness Benefit introduced in 2007 is an additional benefit (which includes an annual Health Risk Assessment)
covering the first test, consultation or immunization per beneficiary for several procedures including pap smears, HIV tests
and mammograms, as well as immunizations from birth to 5 years, from your Overall Annual Limit (as opposed to being
charged from your savings). You would do well to study the various benefits offered as detailed in the brochure, and I
would urge you to take advantage of this generous allowance.

CHRONIC MEDICATION

It is important to note that where a member has chronic medication prescribed for long-term (longer than 3 months) or life-long
illnesses, the member MUST REGISTER THE CHRONIC MEDICATION WITH THE SCHEME, to ensure that these medications
are not deducted from the acute medicine benefit, but rather from the specific chronic medicine allocation. This cannot be done
retrospectively. Full details are contained in the brochure.

IN CONCLUSION

Please be assured that the Board deliberated the new contribution level at length, and is satisfied that the increase is the most
equitable for all concerned, whilst taking into account the overall well-being of the Scheme. Their empathy for the members of the
Scheme is illustrated by the lower than the norm contribution increase whilst sustaining generous benefits, and even enhancing
certain benefits offered where a need was identified.

I would also remind you that any savings not used are “banked” into your “bonus” (accumulated savings) account at the end of the
year. This bonus is always available to you for instances where you exceed limits in other areas, and is never lost. The bonus is
repayable to the member, or transferrable to another scheme with a savings account, on withdrawal from the Scheme.

I have no doubt that the Scheme will continue to be of value to members and their dependents. We continue to be focused on
financial sustainability, competitiveness and viability into the future.

May I take this opportunity, on behalf of the Chairman and members of the Board, to wish you a very successful and healthy 2020.

ANTHONY C WILLIAMS CA(SA)

PRINCIPAL OFFICER: SABC MEDICAL SCHEME