Are amendments to the Bill questionable?

Last week Minister of Health, Aaron Motsoaledi, announced the introduction of two Bills: the National Health Insurance (NHI) Bill and the Medical Schemes Amendment Bill. The Bills, according Motsoaledi, will pave the way for more access to medical healthcare through NHI. The minister said the amendments being introduced are meant to provide much relief to patients finding themselves in financial distress due to the cost of health care.

Some drastic changes

There is a total of 10 amendments to the bill, outlining the changes it will make to the Medical Schemes Act. We noted some of the changes, according to an article on BusinessTech and these are:

1. End of co-payments - The first major amendment includes the abolishment of co-payments – which means that medical schemes will be required to pay for the full amount charged to a patient. “Some people will scream that this amendment is callous and outrageous, and calculated to destroy the medical sector and leave beneficiaries with nothing. We have heard about this before. I wish to assure you that this was well thought of, and the load of complaints received by the department of health as well as the council of medical schemes justifies this amendment. Furthermore, the data at our disposal shows that medical schemes are holding in reserve close to R60 billion that is not being used,” he said.
2. Abolishment of brokers - Motsoaledi said that the Medical Aid Scheme Amendment Bill will abolish the role of brokers, as almost two-thirds of medical schemes clients pay R2.2 billion to brokers without their knowledge. He added that the number of people joining medical schemes has remained relatively static over the last 15 years, questioning what role brokers actually play in the system. Stats SA says that over a 15-year period since 2002, fewer than 17% of South Africa’s population have been members of medical schemes.
3. Abolishment of Prescribed Minimum Benefits - The third amendment is the abolishment of Prescribed Minimum Benefits (PMBs) – which are set to be replaced with comprehensive service benefits. He said that comprehensive service benefits would include services such as family planning, vaccinations and screening services which are not necessarily paid for by schemes under the current system.
4. Governance of medical schemes - This amendment will mean that there are now minimum education requirements before someone is allowed to join a board of or become a CEO of a medical scheme, Motsoaledi said. Motsoaledi said this was to prevent these persons from ‘just listening to whatever the principle officer is saying’, rather than the other way round.

The issue at hand

Elmarie Jensen, Marketing Manager at Genesis Medical Scheme said she believes the South African medical scheme industry is in limbo. In fact, she says, the entire healthcare funding industry is in disarray.

“It appears that the Minister is having difficulty distinguishing between a ‘medical scheme’ and a ‘medical scheme administrator’. Medical schemes are owned by its members and are not-for-profit organisations. Medical scheme administrators, on the other hand, are for-profit companies. In an interview he recently did, the Minister referred to the big fancy building in Sandton as the medical scheme. It is a fancy building and it even has a running track on top, but it is owned by a company – perhaps from the profits of a medical scheme but not owned by the medical scheme,” said Jensen.

“Reading the Bill, one is compelled to ask if this is not the product of some political agenda aimed at destroying medical schemes and private healthcare funding. Medical scheme membership is purchased by individuals with after tax money and it is a private choice, because the public system, paid for with the tax of citizens, is in a state of disrepair. There are two critical issues of detail that are noticeably missing from the Bill – not a single mention is made of the doctors without whom there is no healthcare service and the rate at which the pay in full directive is to operate. On the basis of there being no limit to the charges that doctors can make then, well, even a grade one learner can forecast the result,” she said.

“Sadly, the Minister acknowledged the parlous state of public healthcare, yet he failed to make a single mention of what he intends to do about it. Money is not going to fix the problem – management is. Moreover, the Minister laments the fact that the poor are subsidizing the rich, but he fails to mention that the rich pay tax and that tax is funding public hospitals that are treating the poor at no cost. The rich are already subsidising the poor. The issue of co-payments is not understood. The Minister did not make it clear that the no co-payments will only refer to the basic benefits. If he means that only basic benefits are paid in full, then one must wonder why he says that when the Registrar is applying a pay in full rule to all PMBs. This doesn’t make sense unless the Minister means that every single claim, no matter for what service, must be paid in full without limit. As I said, the devil is in the detail and the Bill is lacking in detail in the critical areas,” she continued.

Supportive of the approach

Dr Jonathan Broomberg, CEO of Discovery Health says, “Discovery Health welcomes the publication of the NHI Bill and the establishment of the NHI Fund. This is a big step towards the achievement of universal healthcare for all South Africans. Very appropriately, the NHI Fund will have an initial focus on priority projects for vulnerable groups where the need is the greatest.” 

“The inequalities in access to quality healthcare services for all South Africans are a major concern for all South Africans. Based on our initial review of the NHI Bill, we are supportive of the general approach taken, including the fact that medical schemes will continue to operate alongside the NHI. We are also supportive of the various governance and advisory mechanisms established. We look forward to working with the Department of Health and other stakeholders to achieve significant progress in the development of the NHI. The draft Medical Schemes Amendment Bill contains numerous complex amendments to the Medical Schemes Act. We are still studying the details of the Draft Bill and will provide more detail on our views as soon as possible,” said Broomberg. 

On the issue of brokers, Damian McHugh, Head: Health Marketing, for Momentum, believes brokers play an integral part in that they are able to conduct a holistic needs analysis for the client, and based on this and the client’s level of affordability, are able to make suggestions in terms of their medical scheme cover. The remuneration model could be improved to align the incentives within the advice environment and engaging with the advice community would be important to achieve this.

“We believe that the private healthcare system and NHI can operate together and provide access to medical treatment for all South Africans. Both systems should be able to work together and support each other in delivering a better, more sustainable health care solution for all South Africans. We believe if public and private systems work together we will have a superior solution,” continued McHugh.

Editor’s Thoughts:
Only time will tell what will happen to the medical schemes industry. On the abolishment of brokers however, we believe, as McHugh said, advice is critical to assist consumers in maximising their value from the solutions available. “Medical scheme brokers are a vital link in the provision of comprehensive needs analysis and advice, without which members would be left uninformed on the specifics of their medical scheme benefits and on the alternative solutions they have at their disposal.” Please comment below, interact with us on Twitter at @fanews_online or email me your thoughts myra@fanews.co.za