Healthcare actuaries in South Africa play a key role in advising medical schemes on benefit
design. In this paper we reflect on the benefits offered by open medical schemes from a consumer
perspective. We argue that the complexity of the benefits, the large number of available benefit
options and the confusing terminology used in product documentation hamper consumer
decision-making. This is particularly relevant given the increased emphasis on the fair treatment
of customers in financial services more generally.
We also argue that the proliferation of offerings and market confusion is a direct consequence of
a weak regulatory environment with schemes clearly incentivised to compete on the basis of risk
selection. Benefit design is a powerful tool for both risk selection and risk pool segmentation.
The challenge faced by actuaries is to provide consumer value within this context.