Medical scheme regulator under fire

Up to 20-million South Africans from low-income households could afford basic private healthcare services if the medical schemes regulator stopped stalling on plans for cheap, pared-down benefit options, a health-care conference was told on Thursday.

The Council for Medical Schemes (CMS) is overseeing the development of a serially delayed framework for low-cost benefit options (LCBO), that will allow schemes to offer packages that are exempted from provisions in the Medical Schemes Act that require cover for a much broader basket of care, known as prescribed minimum benefits.

It has been prevaricating over the LCBO framework since 2015, leaving millions of people from poor households paying out of pocket for private primary health-care services, such as GP consultations and dentistry, because they cannot afford full medical scheme cover, said Insight Actuaries & Consultants joint-CEO Christoff Raath.

While 15% of the population are medical scheme members, the 2020 general household survey found 28.2% of the population turned first to a private health-care provider when they needed care.

“These are the families that can least afford R400 or R500 to go to a doctor,” Raath told delegates at the 21st annual Board of Healthcare Funders conference in Cape Town. “The question we have to ask is why is nothing being done about it?”

The advisory committee the CMS established in 2020 to finalise the LCBO framework had completed its technical work. There was no need for further consultation, he said.

An estimated 10-million people from low-income households could be covered by lowcost benefit options, priced at R124 to R166 a month. If the Treasury scrapped medical scheme credits and used the money to provide a R100 monthly grant towards low-cost benefit cover, the figure could rise to 20-million people, or a third of the population, he said.

Talk of the ANC pressuring the CMS to put the brakes on the LCBO framework as it might pose an impediment to National Health Insurance (NHI) would be a “moral tragedy” if true, he said.

Business Day asked CMS registrar Sipho Kabane before whether the council was deliberately stalling low-cost benefit options while the government developed NHI. In a recent interview, Kabane said the CMS had no ulterior motive, and would like to wrap up the LCBO process as quickly as possible.

The CMS was given the job of developing a low-cost benefit options framework after the government brought the demarcation regulations into effect in April 2017. These regulations defined the difference between medical schemes and health insurance products, overseen by different regulators — the former by the CMS and the latter by the Financial Sector Conduct Authority.

When the demarcation regulations came into effect, the government granted providers of health insurance products a two-year exemption to the rules requiring them to be brought under the watch of the CMS, pending the finalisation of the low-cost benefit options framework. To the frustration of the medical schemes industry, this work is still not complete and the CMS in January granted health insurers yet another extension of the exemption period to March 31 2024.

It means that medical schemes can still not launch their own low-cost benefit options, while the providers of indemnity products that were granted exemption when the demarcation regulations came into force have been protected from new competitors for the past five years.