In a surprise move, the Council for Medical Schemes (CMS) has begun to scrap certain healthcare policies that insurance companies offer in preparation for government’s dream of a National Health Insurance (NHI) scheme.
In a circular sent out on Wednesday, the CMS announced that it would cut a decade-long project to make private healthcare available to about 8 million lower-income households.
This project was aimed at households that respectively earned less than R16 000 and R6 000 a month, and was meant to give people access to treatment in the private sector.
In addition, the CMS has also banned two types of products that about 2 million people rely on, according to the Free Market Foundation.
The first is all varieties of hospital cash policies that are sold by institutions such as Hollard and Clientèle.
These compensate policyholders for certain kinds of hospital expenses, but are not medical aid schemes.
The second variety comprises day-to-day healthcare plans that are used by employers in particular to enable low-income workers to access private general practitioners, pharmacies, dentists and optometrists.
Popular examples of these are Discovery’s Primary Care plan and Momentum’s DomestiCare, which is aimed at domestic workers.
These products must be abolished by March 2021 – years before government’s ambitious deadline for the NHI to start delivering services to the most vulnerable in 2026.
Dr Sipho Kabane, the chief executive officer (CEO) of the CMS, wrote in the circular that the low-cost projects and all the existing low-cost products on the market would undermine the NHI, which is official government policy.
He also said that people were being exploited by opportunistic service providers.
Although the CMS’ express goal is to advance the interests of members of medical aid schemes, the body has repeatedly welcomed the NHI and pledged its cooperation with the project.
The CMS’ board is appointed by the minister of health.
The NHI bill, read together with a bill on medical aids published at the same time, mandates that, after the legislation comes into effect, medical aids will no longer be allowed to render complementary services that the NHI does not offer.
City Press’ sister publication Rapport has previously reported that Treasury objected to the limitations on medical aids in a previous version of the bill because it would have caused unnecessary panic.
Government has since promised that medical aids would only be restricted after the NHI begins to function properly.
The medical industry, however, was caught by surprise by the CMS’ announcement that it would begin laying the groundwork for the NHI.
Dr Jonathan Broomberg, CEO of Discovery Health, said the unexpected announcement would not only affect low-income households, but also all mainstream medical aid plans.
The low-income project was started with the express purpose of making medical aid schemes more financially sustainable.
Medical aids are in a death spiral.
As a result of minimum prescribed benefits (MPBs) – a list of more than 270 conditions that must be covered in full and without any limitation – the difference between medical aid schemes’ top plans and those at entry level are decreasing.
As a result of the requirement, entry-level plans are becoming increasingly unaffordable, leading to a declining number of wealthier people and sick people belonging to medical aid schemes.
The risk pool gets smaller on an annual basis, which means that premiums shoot up and young, healthy workers are deterred from joining.
The low-cost project – which was only set out in a discussion document by the CMS in March – would have offered a way out by providing for medical aid options that would not have required schemes to pay out for all MPBs, but would still provide relatively comprehensive cover.
The CMS’ own estimates were that this would make medical aid affordable for hundreds of thousands of families, broadening the risk pool and relieving a major burden on the public sector.
The proposed premiums in the discussion document were on average R828 and R1 647, respectively, for an entire family.
Damian McHugh, CEO of marketing for Momentum Health Solutions, said they could not merely accept the announcement, and would now engage Business Unity SA and other industry institutions in an attempt to change the mind of the minister and the CMS.
McHugh said that the CMS had promised that it would come up with a revised MPB package that would solve the problems, but Momentum doubts whether that will be in place by 2021.
This process has also been ongoing for years.
The CMS last week published a proposed primary healthcare package (PHC) for comment.
It is expected that the PHC package will serve as a basis for the NHI’s services.
The package includes preventative health services such as doctors’ visits, a closed list of medication and basic procedures such as having a wound stitched.
Kabane referred to the PHC package as the basis for the development of an affordable and quality healthcare financing package for all South Africans.
Broomberg said the PHC package could mean additional obligations for medical aid schemes if some benefits are not removed from the prescribed minimum benefits list, and could lead to medical aid schemes experiencing even greater difficulties.
The PHS package does not yet have cost determinations.
One of the reasons it was published was for doctors and medical aid schemes to send in data about their claims for these items so that the CMS could determine what it would cost.