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Council changes tack on cheaper medical aid options

Riana De Lange2020-01-26 19:21


The Council for Medical Schemes (CMS) appears to be having second thoughts about its announcement that certain low-cost medical aid products will be illegal in just over a year

The Council for Medical Schemes (CMS) appears to be having second thoughts about its announcement that certain low-cost medical aid products will be illegal in just over a year.

At a CMS meeting with insurers, medical aids and other role players this week, it said it would continue to develop a framework for a low-cost benefit option, or something of a similar nature.

The CMS and the private sector have been working on developing a low-cost benefit model for the past five years.

In March last year, the council’s position, contained in a discussion document, was that it would still allow certain medical aid options that did not cover all minimum benefits but that paid for reasonably comprehensive services.

While this model was being developed, exemption was granted to certain insurers to continue offering products that did not fall under the Medical Schemes Act (MSA), but that offered a form of medical cover to people unable to afford expensive medical aid packages.

An estimated 2 million people use such products. They do not earn enough to pay medical aid premiums.

The cost of these products start at a monthly premium of about R300 per beneficiary.

But last month, Dr Sipho Kabane, registrar for the CMS, announced by way of a circular that the low-cost model being developed, and all existing low-cost products, would undermine the National Health Insurance (NHI) scheme, which was government policy.

A public outcry ensued.

In the letter, the CMS said the products that were set to become unlawful by March 2021 would consist mainly of primary healthcare plans for basic day-to-day care.

But the NHI is only due to begin delivering services in 2026.

The council also said it was reviewing the list of prescribed minimum benefits – which medical aid schemes must pay for, irrespective of what plan a member is on – and the costs thereof.

It viewed this as a better way of making quality care affordable, rather than relying on a low-cost benefit model or similar products on the market.

But at this week’s meeting, the CMS appeared to take a more accommodating approach.

Richard Blackman, chief executive officer of Day 1 Health, an insurer that offers these products, said it appeared that the CMS had made the announcement prematurely, before consulting role players in the industry.

The CMS said it planned to establish an advisory committee comprising industry representatives.

Blackman said he remained hopeful that negotiations with the CMS would lead to an appropriate solution for unlimited access to primary healthcare packages.

He said that if the CMS did not withdraw its circular, it could expect a flood of appeals in terms of the MSA.

Mike Settas, from the Free Market Foundation’s health policy unit, said the reasons for the apparent turnaround were unclear.

He said the registrar was now requesting discussions with role players to find a permanent solution for low-income products going forward.

But this process could take years, and the interim exemption framework will expire at the end of March.