Legal and Compliance Officer at Africa Unity Life, Johan Ferreira, evaluates the Medical Schemes Amendment Bill and explains how the private sector can use their knowledge to shape National Health Insurance (NHI) for the better.
Health Minister Aaron Motsoaledi presented proposals to shake up the medical aid industry to a cabinet committee in May. Among his submissions was a proposal to introduce uniform tariffs for services and prohibit co-payments, a move which could prove a game changer for the industry and consumers.
Motsoaledi says the new rules on benefits, prices and governance will give consumers a better deal.
The changes are contained in the Medical Schemes Amendment Bill. We are of course waiting on the gazetting of the bill. What is however clear from the Minister is that the Bill seeks to improve the regulation of the medical schemes industry and to align the regulatory framework to the changes that have taken place over the past decade in the sector.
In relation to giving the consumer a better deal, I understand that a further primary aim of the bill is to regulate medical schemes in such a way that co-payments for healthcare will be eliminated and that a uniform tariff structure for healthcare providers be implemented.
This sounds positive but might also have further unintended repercussions. As an example, co-payments charged for certain procedures are in place to protect the funds available for claims that are truly a medical necessity – it is a risk management tool. In such circumstances, co-payments should encourage members to consider alternatives to these elective procedures.
If co-payments on elective procedures are scrapped, this could open up risk for the majority of members in favour of the few that needs it.
As for the proposed uniform tariff, the details of how the uniform tariffs for healthcare providers will be arrived at are unclear at this stage.
There was speculation that the tariffs will not be addressed in the Medical Schemes Amendment Bill, but rather by the outcome of the Competition Commission’s Health Market Inquiry. This is an important step towards protecting healthcare consumers if a sustainable model can be identified.
Medical aid schemes
With regards to the smaller medical aid schemes and how the legislation will affect them, there have been suggestions that the smaller schemes should be disbanded in order to incorporate these members in the bigger schemes.
This is however something that should be addressed in legislation as currently the Medical Schemes Act allows a scheme to be registered if they have 6,000 or more members.
Amalgamation of these smaller schemes is also a possibility. The NHI proposals of course envisage a single system, with an option for the wealthy to buy additional cover.
Taking into account the payroll tax that is likely to be introduced to fund NHI will make people seriously consider whether the additional cost of medical scheme membership is worth it. This can have a devastating influence on smaller schemes as they will play a role in filling the gap, so to speak.
Another aspect of NHI, more specifically, envisages a public-private partnership (PPP) and I reckon the private sector would have to come to the party to help with the development and successful implementation of NHI.
With the Medical Schemes Amendment Bill in the final stages and NHI on the go we need the best skills from the private sector to contribute to the public sector to contribute to a better life for all South Africans.
We don’t have to reinvent the wheel with NHI – we have to make use of the lessons learnt in the private sector. This can set the stage for a PPP when NHI is implemented that can actually work. The private sector has the knowledge that can shape NHI to the benefit of not only the public sector but also the private sector. They need to take hands in this and work together.