South Africa's AIDS Epidemic Leading to Higher Insurance Premiums, Reduced Coverage
December 17, 2003
The AIDS epidemic in South Africa is leading to higher insurance premiums and reduced benefits, the New York Times reports (Itano, New York Times, 12/17). About 25% of South Africa's economically active individuals are HIV-positive, with about five million total HIV cases in the country (Kaiser Daily HIV/AIDS Report, 10/6). Although South Africans who are covered by life and health insurance policies tend to be wealthy and white -- the segment of the population least affected by the epidemic -- the impact of the disease has been increasingly felt by the insurance industry, the Times reports. This is especially true for companies that offer employer-provided group health and life insurance, which generally cover all employees regardless of their health status, according to the Times. Metropolitan Life, one of the first South African insurance companies to study the AIDS issue, has said that unless antiretroviral treatment -- which is viewed as a "cost-effective" means of addressing the epidemic -- becomes more widespread, the cost of providing health, life, funeral and disability insurance could double between 2000 and 2005 and triple by 2010, when the number of AIDS-related deaths in the country is expected to peak. Companies that offer individual insurance policies have protected themselves from HIV-related costs by issuing policies primarily to HIV-negative people, and an increasing number are requiring follow-up HIV-tests to retain coverage. Although the South African government prohibits insurance discrimination based on health status, the companies can cap coverage, increase premiums or introduce mandatory waiting periods before coverage takes effect. According to a study conducted by FinMark Trust, one in six people in South Africa has medical insurance and one in five people has ever had life insurance. In addition, the survey found that 3.8 million South Africans say they no longer have medical, life, disability or other insurance.
Reprinted with permission from kaisernetwork.org. You can view the entire Kaiser Daily HIV/AIDS Report, search the archives, or sign up for email delivery at www.kaisernetwork.org/dailyreports/hiv. The Kaiser Daily HIV/AIDS Report is published for kaisernetwork.org, a free service of the Kaiser Family Foundation, by The Advisory Board Company. © 2003 by The Advisory Board Company and Kaiser Family Foundation. All rights reserved.
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