HEALTH FUNDING CRISIS FOR SOUTH AFRICA'S ELDERLY

A recent survey suggests that years of South African pensioners' exclusion from company healthcare schemes is having a knock-on effect on state finances, as the elderly are forced to rely on public provision.

In 1995, 89% of companies provided health funding for pensioners, but by 2003, this rate had fallen to just 43%. Industry sources blame the decline on a 1997 law requiring post-retirement health fund liabilities to be declared in company accounts. As firms became more aware of potential retiree costs, medical scheme contributions for pensioners were capped or reduced.

The cost of private insurance is soaring in South Africa, rising 18.5% in 2004 alone, driven by factors including greater use of high-tech equipment and the growing cost of imported drugs. To address the issue, South Africa's Council for Medical Schemes has recently established a task force to study creating affordable medical schemes for lower-income groups.