CMS eases stance on proposals

The Council for Medical Schemes (CMS) has softened its stance on medical schemes that have publicised planned products for 2024 ahead of its approval, saying it acknowledges their need to communicate with consumers.

The Council for Medical Schemes (CMS) has softened its stance on medical schemes that have publicised planned products for 2024 ahead of its approval, saying it acknowledges their need to communicate with consumers and saying they must make it clear they are still waiting for sign-off.

The CMS is the medical schemes watchdog agency responsible for regulating 71 medical schemes and safeguarding the interests of 8.95million beneficiaries.

Last week, its then acting registrar, Zongezile Baloyi, instructed SA’s five biggest open medical schemes to retract all communication about their planned premiums and benefits for 2024 as the regulator had not yet given them the green light.

His letter to medical schemes stunned the sector because for the past 25 years they have publicised their plans in the previous September, to give financial advisers, employers and consumers time to consider their options ahead of changes that take effect on January 1.

The regulator appears to have targeted only five schemes

— Discovery Health Medical Scheme (DHMS), Bonitas, Momentum, Bestmed and Medihelp — and turned a blind eye to smaller schemes that have also communicated their plans, such as Profmed and Camaf.

On Thursday, the CMS, which declined to answer Business Day’s questions about the rationale for the letters sent to the five schemes, issued a statement in which it said: “CMS acknowledges that medical schemes may want to communicate the planned or proposed changes to benefits ahead of the approval by the regulator. However, it is important for medical schemes to clearly communicate that the proposed changes are subject to approval by the regulator.”

Discovery Health CEO Ryan Noach said the schemes’ approach is in line with the Medical Schemes Act’s requirements to communicate clearly with members. “The communication typically also includes clear disclaimers that the implementation of proposed benefit changes is conditional on approval by the CMS.

“Failure to communicate timeously could leave schemes in breach of their obligation to inform members; could leave financial advisers with inadequate time for analysis, technical engagement and advisory consultations; and could expose members to an unfair deadline to make their changes,” he said on Thursday.

Discovery Health is one of SA’s biggest medical scheme administrators, with DHMS its biggest client. “The Medical Schemes Act is explicit that benefit amendments may not be implemented without the formal approval of the CMS. The act, however, makes no statement about the requirement for formal CMS approval prior to communication of intended changes, whatsoever,” he said.

DHMS has filed an appeal against the directive contained in the letter it received.