The indefensible stance taken by the Road Accident Fund (RAF) that it will not pay claims or any past medical expenses that were paid by medical schemes towards the health of their members is an affront to the hard work of South Africans.
The decision has already been declared unlawful by the high court and the Supreme Court of Appeal has refused to entertain the RAF’s appeal due to its poor prospects of success.
In the high court ruling, the judge was at pains to point out that the RAF Act was in no way intended to impoverish medical schemes.
The act is clear that the levy paid on fuel provides the funds for payment of compensation to motor vehicle accident victims and nothing in the law obliges medical aid schemes to contribute towards such compensation by the payment, from the time of hospitalisation and treatment of a motor vehicle accident victim, of medical expenses without a reasonable expectation of reimbursement upon settlement of the claimants’ claims in terms of the act.
The unilateral decision by the RAF to think medical aid members are not worthy of rights conferred by the act is flabbergasting if not irresponsible. Armed with taxpayer’s money, the RAF has opted to take its hopeless case to the Constitutional Court. In the interim the entity has refused to entertain claims from medical schemes.
Discovery, which has led the charge against RAF, says the industry is losing about R2m a day due to the RAF’s fun show.
At a time that the government and business are struggling to stitch up a social compact, this adds to the frustration of business and ultimately law-abiding citizens who expect better from their government.
It is also disheartening that the high court, despite ruling that the RAF acted unlawfully, declined Discovery’s application that the fund be compelled to process claims from medical aids while the apex court is still seized with the matter.
The high court argued that Discovery Health had not shown that the medical schemes would suffer irreparable harm until the Constitutional Court heard and decided on the dispute. This is unfortunate.
Every day that the RAF fails to pay for past medical expenses, medical schemes lose millions of rand that could have been used to provide better benefits and lower premiums for their members. The list of road accident victims being denied their rightful compensation and access to quality healthcare will grow, the longer the situation persists.
Every day that the RAF fails to pay for past medical expenses, it erodes public trust in state institutions.
The RAF’s behaviour is unacceptable and indefensible. It is not only violating its legal obligations but also its moral and social responsibilities. It is not only harming the medical schemes and their members but the entire health system and society at large.
It is supposed to provide relief and compensation to the victims of road accidents, but instead, it is a cesspool of mismanagement and inefficiency. It has not appointed a new board of directors for the fund, despite the expiry of the term of the existing board earlier in 2023. This means that the board is operating illegally and without accountability.
This was exposed by the chair of parliament’s standing committee on public accounts (Scopa), Mkhuleko Hlengwa, who led an on-site visit by Scopa members to the RAF’s Menlyn, Pretoria claims office recently. What they found there was shocking and appalling.
The office, which handles claims from four provinces, was in a state of chaos and disarray. Boxes of claims were piled up everywhere, in offices, corridors and even in the basement parking lot. Staff were working in deplorable conditions, sitting on boxes and sharing makeshift desks. Security guards tried to prevent MPs from entering the building and talking to staff.
The RAF’s financial situation is equally dire. It is technically insolvent, owing more than R300bn in unpaid claims. It received a disclaimer from the auditor-general last year for its 2021/22 financial statements, which were found to be materially misstated. The fund has adopted new accounting methods that obscure its true liabilities and assets.
The government needs to intervene and ensure that the RAF is reformed and restructured to serve its mandate effectively and efficiently. One possible solution is to replace the fault-based system with a no-fault system that would reduce litigation costs and speed up payments.
The scheme collects just more than R40bn a year in fuel levies as revenue, but about a quarter of the money flows to attorneys, making legal fees the second-biggest cost after compensation to accident victims, while medical costs eat up another R2bn.
Whatever the solution, it needs to be implemented urgently and transparently. The RAF cannot continue to operate as it does now, at the expense of its claimants, its funders and its staff. It is time for action, not excuses.
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