Annual General Meeting report
On 22 May, Anglo Medical Scheme held its 50th Annual General Meeting in Johannesburg. The Scheme’s Chairman, Colleen Elliott, reported that the Scheme posted a small deficit for the period under review, ending with a solvency ratio of 473%. She noted that, despite the country’s continued economic downturn, the Scheme’s investment portfolio only decreased by 0.4% over the period. Further, the Scheme contribution increase of 8.9% was maintained close to the industry average.
Marius Jacobs, the Deputy General Manager of Discovery InHouse, presented the financial results. He highlighted the net deficit reported in the Statement of Comprehensive income, stating it was largely due to the significant decrease in the investment returns and the increased net healthcare deficit of almost 30%. Specialist and hospital costs were the drivers of the increase. The Scheme received an unmodified audit opinion issued by PricewaterhouseCoopers Inc (PWC). The meeting accepted the 2018 financial statements, the auditor’s report and the report of the Board of Trustees, as having been fairly presented with no material instances of non-compliance with the requirements of the Medical Schemes Act.
The Chairman took the meeting through membership changes noting the continued decrease in membership and the movement to more affordable plans. The meeting agreed to the reappointment of PWC as the Scheme’s auditor for the first year of their four-year annual renewal term by way of a show of hands. The meeting further elected the members of the Disputes Committee for the following year: Prof. Casper Badenhorst, Carol Dixon and Gugu Dlamini. The Chairman thanked the outgoing member Bob Hunt for his availability in the previous year
The Principal Officer informed the meeting of the only change to the Board of Trustees, the retirement of Medwyn du Bois at 31 December 2018. For a list of Trustees for the current year, please click here. The Chairman then reported on Trustees’ fees for the year under review.
There were no notices or motions placed before the meeting, but members had the opportunity to ask questions (see below). The Chairman thanked the Board of Trustees, the administrator and independent consultants for their assistance and service during 2018. She expressed her special thanks to Medwyn du Bois, the longest serving Trustee of the Scheme by many years, for his unwavering commitment and dedication to the Scheme and wished him the very best for his retirement. She then closed the meeting and thanked all members present for their attendance.
Questions & Answers from the AGM
Q: Why don’t we have a Discovery-like ‘over the threshold benefit’, to be used when you run out of savings, after you pay from your pocket up to a point?
A: The Board of Trustees debates periodically whether AMS should remain a traditional Scheme or change to include benefits such as threshold limits. The actuarial assessments have previously indicated that it would not be financially viable to implement a Discovery-type threshold benefit. New benefits, such as these, would add to the existing costs of the Scheme, and as it operates according to a single budgeted income (the sum of all contributions received), other benefits would have to fall away. Further, a traditional scheme model is easier to use, which the Board believes suits the AMS membership better. The Trustees’ mandate is to keep contributions as affordable as possible, therefore, a threshold model was not considered suitable.
Q: Can you give us an update on NHI and the Medical Schemes Amendment bill?
A: Comprehensive information was sent to members in the August 201 8 MediBrief. As communicated, the NHI and Medical Schemes Amendment draft bills were published last year. Thereafter, the industry submitted comprehensive responses which were considered. It was expected that some amendments would be made to the bills before going to the Nedlac Committee, which would then provide another opportunity for the industry to comment. The basic benefit package described in the amendment had not been finalised, nor had it been announced how NHI would be funded. The NHI fund had been established and the first monies were to be used to strengthen basic and rural district healthcare systems. While it was certain that the NHI bill would pass, it remained unclear as to how medical schemes would participate in the broader public system. When the 2019 tax season opens, most likely on 1 July 2019, you may need to submit your income tax return to the South African Revenue Services (SARS). For your annual tax return you will also need your medical scheme tax certificate.