SA’s biggest representative body for medical schemes, the Board of Healthcare Funders (BHF), has added its voice to criticism of the industry regulator for its lack of progress in developing low-cost benefit options, saying its stance is irrational and depriving millions of people of affordable access to private healthcare services.
At issue is the pace at which the Council for Medical Schemes (CMS) is developing a legislative framework that will allow schemes to offer cheap, pared-down options focused on primary healthcare that are exempted from provisions in the medical schemes act compelling them to provide cover for a much more extensive basket of care known as prescribed minimum benefits (PMBs).
It was given this task after the government implemented the demarcation regulations in 2017, which defined the difference between medical schemes and health insurance products, regulated by the CMS and the Financial Sector Conduct Authority respectively.
Providers of health insurance products were granted a two-year exemption from the rules requiring them to be brought under the ambit of the CMS, pending the finalisation of a low-cost benefit options framework. To the frustration of medical schemes, the CMS has repeatedly renewed the exemption for insurers but failed to finalise the low-cost benefit option framework for medical schemes, enabling a limited number of established health insurers to offer primary healthcare cover without competition from medical schemes.
“Insurance companies have been approved to provide these services that medical schemes for the longest time have been requesting to provide from the regulator — and there is no rationale for the regulator’s lack of approval in this regard,” said BHF head of research Charlton Murove.
His comments follow an announcement by CMS registrar Sipho Kabane that the regulator is investigating the conduct of Insight Actuaries & Consultants joint CEO Christoff Raath for publicly questioning the pace at which the regulator is driving reform.
Raath, who is a member of the CMS advisory committee on low-cost benefit options, told the annual BHF conference last week that millions of people were paying out of pocket for private healthcare services because they could not obtain affordable cover, which would be in their reach if medical schemes were permitted to provide low-cost options.
He also pointed out that the CMS has failed to review the prescribed minimum benefits for the past two decades, despite provisions in the medical schemes act that require this to be done every two years.
Murove said medical schemes were ideally positioned to offer low-cost benefit options to consumers because they had the infrastructure and know-how to run these products efficiently. Consumers also stood to benefit as they would be eligible for medical scheme tax credits, which they cannot claim if they buy health insurance, he said.
Murove said the CMS’s claim that the BHF wanted to do away with PMBs was wrong.
“To state that the industry is saying the PMBs should be taken away is very inaccurate and misleading. Medical schemes are not allowed to provide options that do not offer PMBs, thereby compelling members to buy PMB benefits that they cannot afford,” he said.
The CMS’s failure to regularly review the PMBs had led to irrational gaps in their cover. For example, the PMBs include bipolar disorder but not depression. And while they cover abortion, they do not cover contraceptives, he said.
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