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Rules put medical aid in reach of low earners

by Tamar Kahn, 09 September 2015, 07:14

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THE Council for Medical Schemes has spelt out the mandatory requirements for schemes that want to offer low-income workers a cheap but pared-down version of the products currently on the market.

This follows the council’s approval last month of an exemption framework to the Medical Schemes Act that creates the legal space for such products to exist.

The development is intended to expand the medical scheme market, which is out of reach for millions of lower-paid people in formal employment, and is one of the most significant policy developments since the act came into force over 10 years ago.

The council estimates that there could be as many as 15-million potential beneficiaries in this untapped market.

Council head of benefits management Paresh Prema said on Tuesday that medical schemes could begin offering "low-cost benefit options" for as little as R180 a month as early as January.

The most important departure from the status quo is that low-cost schemes will not provide cover for prescribed minimum benefits, a requirement in the Medical Schemes Act. Nor will they provide care in private hospitals.

Low-cost benefit options will instead focus on preventative, primary healthcare, said Mr Prema. Members will have to use a network of providers, but will be guaranteed that they will not face any co-payments.

Guidelines issued to the medical schemes industry last week spell out the mandatory minimum requirements for low-cost benefit options. These include: five network consultations with a nurse or doctor a year, screening tests for diseases such as tuberculosis, HIV and cervical cancer, as well as chronic conditions like diabetes and high cholesterol; a limited list of medicines for acute and chronic conditions; basic pathology; basic radiology (X-rays and ultrasound); as well as optometry and dental care.

These benefit options will only be available to people who earn less than the tax threshold.

Many of the proposals submitted by industry players to the council earlier this year suggested restricting membership to employer groups, but the council wants to see membership offered on the open market, said Mr Prema. Schemes that wanted to limit membership to an employer group would have to demonstrate "exceptional circumstances".

Only registered medical schemes will be allowed to offer low-cost benefit options, which means health insurance companies selling primary care products will only be able to move into the market if they partner with existing medical schemes, he said.

This is not good news for health insurance companies, which face an uncertain future in the face of the government’s plans to tighten regulatory oversight of health insurance, gap cover and hospital cash plans.