As role players in the health sector begin preparing their
response to the NHI Bill and the Medical Schemes Amendment Act released
yesterday, key questions remain on the affordability and feasibility of the two
pieces of legislation in South Africa’s constrained health system. Both will be
gazetted today for public comment with a three month-period allowed for
comment.

Explaining the rationale behind the sweeping proposed
changes to the Medical Schemes Act, Health Minister, Dr Aaron Motsoaledi was adamant
that it was aimed at providing “immediate relief to medical schemes
beneficiaries from serious challenges experienced in the current medical scheme
regime”, and to align the medical scheme environment to that which will exist
in NHI.

“This will lead to a smooth, harmonious transition that does
not unduly disrupt access to healthcare,” Dr Motsoaledi said.

One of the most contentious amendments is the abolishment of
all co-payments by beneficiaries, meaning that medical schemes will have to pay
in full for all healthcare services rendered with patients not having to pay
anything at the point of service. This is likely to impact severely on the
sustainability of medical schemes. But Dr Motsoaledi indicated that a review by
the Council for Medical Schemes (CMS) is underway of the statutory requirement
for medical schemes to hold 25% of their earnings in reserves to make more
money available to settle beneficiaries’ bills in full.

He said data show that medical schemes are holding R60bn in
reserves, amounting to medical schemes keeping on average 33% in reserves “which
means unnecessary accumulation at the expense of patients”.

“These huge reserves were accumulated partly through high
premiums and the introduction of co-payments to ensure that schemes don’t have
to dip in their reserves,” Dr Motsoaledi said.

In terms of the amendments, Prescribed Minimum Benefits (PMBs)
will also be abolished and replaced with “comprehensive service benefits” to
move away from the current package that, the Minister said, cover mostly
hospital-based conditions. However, he was vague about wat these service
benefits will cover apart from saying that it will focus on primary healthcare
such as family planning, screening and wellness services.

The other amendments include:

  • ·        
    Abolishing the use of brokers in the medical
    scheme environment and to release the more than R2.2bn currently paid to
    brokers to pay for beneficiaries’ direct healthcare expenses.
  • ·        
    Compelling medical schemes to pay back savings
    if a member use a designated service provider (DSP) according to the scheme
    rules.
      Motsoaledi said although DSP
    arrangements should be encouraged, the problem is that these savings are passed
    on to the medical schemes or their administrators instead of being given back
    to members in the form of a premium reduction.
  • ·        
    Stopping medical schemes from imposing waiting
    periods and late-joining penalties when members change medical schemes.
  • ·        
    Preventing medical schemes from introducing
    benefit options unless they are approved by the Registrar of the CMS to be in
    the best interest of members.
  • ·        
    Declaring the carrying on of the business of a
    medical scheme by an entity not registered as a medical scheme as an offence.
  • ·        
    Creating a central beneficiary registry within
    the CMS aimed at addressing and understanding issues such as the country’s disease
    profile and trends in scheme members’ health-seeking behaviour. Motsoaledi said
    this will help in planning the services to be made available in the NHI.
  • ·        
    Introducing a cross-subsidy model to allow for
    the rich and young and healthy to subsidise the poor and the old and the sick.
    Motsoaledi noted that the present contribution rates are the same for lower
    income and higher income earners for exactly the same benefits.