Medical scheme amendments:

The honourable Minister of Health, Dr Aaron Motsoaledi, revealed the following proposals contained in the Bill during a media briefing on 21 June 2018.

  • End of co-payments
  • Abolishment of brokers
  • Abolishment of Prescribed Minimum Benefits
  • Addresses unequal benefit options
  • Fake medical schemes to be outlawed
  • Creation of a central beneficiary registry
  • Income cross-subsidisation model
  • Medical Aids must ‘pass back’ savings
  • Cancellation of membership
  • Governance of medical aid schemes
  • Below is a direct extract from the Minister’s media briefing document on the first three which will impact most on our subscribers.

Co-payment abolition

The first amendment is to abolish what has come to be known as co-payments. Co-payments mean that the scheme pays a portion of the bill that a provider (Hospital or Private doctor) charges to a patient. The rest of the money is supposed to be paid by patients from their own pocket.

The amendment means that every cent charged to the patient must be settled fully by the scheme and the patient should not be burdened with having to pay.

There are people who will scream that this amendment is outrageous and calculated to destroy medical schemes and leave beneficiaries with nothing.

I wish to assure you that this was well thought of. The load of complaints received from the public by us in the Department of health as well as by the Council for Medical Schemes (CMS), i.e the medical schemes regulator, justifies this amendment.

Furthermore, the data at our disposal shows that medical schemes are holding reserves of close to R60 billion that are not being used.

Granted, there is a statutory requirement that medical schemes should have 25% of their income in reserve. This is to cater for emergencies. But presently the R60 billion is equivalent to 33% reserves, which means unnecessary accumulation at the expense of patients.

These huge reserves were accumulated partly through high premiums but also by introducing the co-payments such that medical schemes avoid having to pay or even dip into the reserves if the situation demands.

Furthermore the Council for Medical Schemes (CMS) is busy reviewing this statutory requirement of 25% with a view to releasing enough money for patients rather than holding a lot of reserves while patients suffer the hardships.

Brokers Abolished

The second amendment is to abolish the practice of using brokers within the medical scheme environment. Almost two thirds of principal members of medical aid schemes pay monthly to a broker as part of their premium. Many of these members do not even know that they are paying this money which in 2018 is R90.00 per month.

The total amount paid to brokers in 2017 was R2.2 billion.

We want this money to be made available to pay for direct health expenses of members rather than serving brokers who are actually not needed in the healthcare system.

We are aware that most of the work supposedly done by brokers is actually done by the Council for Medical Schemes – the statutory body.

Abolishment of PMBs

The third amendment is to abolish the practice of Prescribed Minimum Benefits (PMBs) and replace it with comprehensive service benefits. Prescribed Minimum Benefits were mostly hospital-based conditions. Comprehensive service benefits will include Primary Health Care (PHC) like family planning, vaccination, screening and wellness services.

Comment

We fully endorse the goals which the proposed amendments hope to achieve. In fact, it is taking far too long, and the suggested quick-fixes do not address the most urgent needs.

The World Health Organisation statistics show that South Africa, at 42.2% has the highest voluntary health insurance spend in the world. One has to wonder whether the honourable Minister realises that this is a direct result of the terrible state that public healthcare is in.

South Africa’s enormous security industry is also a direct result of the failure by the state to perform its statutory duty towards its citizens. Ditto education.

The same focus and efforts currently underway to reconstruct and repair state owned enterprises should be employed to restore healthcare, security and education to a level where its benefits the ordinary people of South Africa, and not the fat cats and patronage appointments with their snouts in the self- enrichment troughs. It starts with proper management and the appointment of properly skilled people.

As regards his views on the role of healthcare advisers, I can at best suggest that he must have been misinformed (or should that read disinformed?). After 40 years in the financial services industry I am unable to grasp the intricacies of options offered by ONE scheme, never mind everything that is on offer. I make use of the professional knowledge of my broker, and am very happy to pay a retainer for the use of his services during the year, should the need arise. To suggest that a financial adviser is not a professional flies in the face of exactly what FAIS and all subsequent legislation sets out to achieve – the professionalisation of the industry.