Dis-Chem has defended its health insurance partnership with Centriq and Kaelo, saying a recent regulatory ruling should be seen as a clarification of process rather than a threat to retail-led healthcare models that are helping thousands of South Africans access affordable care.
The pharmacy group was responding to a decision by the Council for Medical Schemes (CMS), which found that changes to the branding and presentation of Centriq’s MyHealth insurance products under the Dis-Chem name created the impression of a new product and should have been submitted for formal regulatory approval.
While the ruling centres on a technical issue around branding, its implications stretch beyond the companies involved.
Dis-Chem’s long-term strategy is focused on healthcare, with pharmacies positioned as entry points for primary care, wellness services and access to healthcare funding products. The decision raises broader questions about how far large retail brands can go in attaching their names to regulated health products without triggering additional regulatory scrutiny.
Dis-Chem insists the ruling does not undermine retail-led healthcare partnerships. Instead, it says it reinforces the importance of treating branding and presentation as material regulatory changes, rather than cosmetic marketing decisions.
“We see this as strengthening the framework for responsibly scaling access to healthcare, not limiting it,” the group said.
We see this as strengthening the framework for responsibly scaling access to healthcare, not limiting it
— Dis-Chem
The issue comes at a sensitive time for South Africa’s healthcare system when private healthcare is becoming increasingly unaffordable for many households, while public facilities remain under strain.
Dis-Chem estimates that only about 17% of the population belong to private medical schemes, leaving the vast majority reliant on the public sector or without formal healthcare cover.
The retailer says products such as MyHealth help bridge the gap by offering affordable, accessible health insurance to people who would otherwise remain uninsured or underserved. According to Dis-Chem, market conduct indicators show strong and appropriate usage of these products, with no evidence of customer confusion or mis-selling.
Dis-Chem’s move into healthcare funding began in 2021, when it acquired a 25% stake in Kaelo Group, a provider of essential healthcare solutions.
The strategy was expanded in 2022 with the launch of medical insurance and gap cover products for individual customers under the Dis-Chem Health brand, while Kaelo continued to focus on the corporate market under its own name.
The medical insurance offerings are designed to cover everyday healthcare needs rather than catastrophic events.
Integrated approach
Benefits include nurse-led care, virtual and in-person GP consultations, medication, basic dentistry and optometry, preventative health screenings and mental health support. Dis-Chem says this integrated approach is aimed at lowering healthcare costs, expanding access and supporting South Africa’s longer-term goal of universal healthcare.
The CMS ruling followed an appeal by Centriq, the underwriting insurer for the MyHealth products, which was dismissed by the Appeals Board. The regulator found that the way the products were branded and presented under the Dis-Chem name amounted to a material change that should have been submitted for approval, even though the underlying product remained the same.
According to Dis-Chem, the finding did not challenge the legality of the MyHealth products themselves, nor the principle of white-labelling, which allows insurers to market products under a partner’s brand. The group said no customers lost cover, no benefits were altered and the insurer was always clearly disclosed.
“No customers have lost cover, and the products are now presented in a fully compliant manner.”
The MyHealth products were approved by the regulator several years ago and operate under the exemption framework that allows certain health insurance products to sit outside traditional medical schemes. Dis-Chem says the dispute related solely to naming and presentation, not to the structure, benefits or legality of the products.
Centriq and Kaelo, which administers the products, have both said they were clearly identified across all customer touchpoints, including policy documents, terms and conditions and marketing material.
The regulator had warned that branding and presentation changes can have regulatory consequences.
In Circular 48, the CMS cautioned that exempted insurers must follow strict processes when making changes and that non-compliance could result in enforcement action, including penalties or the withdrawal of exemptions.
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