Health insurance study needed, says DA
Critics warn that workers who cannot afford medical scheme cover stand to lose their access to private healthcare services
The Treasury should conduct an impact assessment of the government’s controversial demarcation regulations as they threaten low-income earners’ access to private healthcare, says the DA.
The regulations, which were published in the government gazette two days before Christmas, will from April 1 impose tight restrictions on the kinds of health insurance products that may be sold, along with new controls on their marketing.
The Treasury and the Department of Health have collaborated on the regulations, which, they say, are intended to stabilise the medical schemes industry and to protect consumers. But critics, including the DA, say the fact that the regulations will phase out primary healthcare products before a viable alternative is firmly established means workers who cannot afford medical scheme cover stand to lose their access to private healthcare services.
"The impact of the regulations needs to be assessed. They are entrenching the vested interests of medical schemes, and crowding out [primary] health insurance products," DA shadow health Minister Wilmot James said on Wednesday.
James said he had written to Finance Minister Pravin Gordhan requesting a regulatory impact assessment be conducted "as a matter of urgency", and that the results be made public.
He questioned the legality of the government’s move to scrap primary health insurance products, saying it inhibited citizens’ rights to choose and practice their trade freely.
The regulations spell the death knell for primary healthcare insurance products, which the government says are doing the business of a medical scheme. They are to be phased out over a two-year period.
During that time the Council for Medical Schemes (CMS) is to develop guidelines for cheap pared-down medical scheme options that will provide similar benefits to primary health insurance products. These options would offer less than the medical scheme packages currently on the market.
Day1 CEO Richard Blackman said the regulations infringed upon the rights of patients who did not want to rely on the state sector. "Consumers will be left high and dry, if they can’t afford medical scheme cover," he said. Day1 provides health insurance products to employer groups, and has 22,000 clients under cover, he said.
KaeloXelus MD Michael Settas said the government was prioritising the interests of the medical schemes industry over those of low-income workers.
The two-year deadline set for the establishment of a regulatory framework for low-cost medical scheme options was unrealistic, as the CMS had twice failed to implement low-cost alternatives, he said.
Companies will be allowed to continue to sell gap cover insurance products to people who have medical scheme cover, as well as hospital cash plans, provided they are not marketed as alternatives to medical schemes. The payouts for gap cover products will be limited to R150,000 per year, while hospital cash plan pay outs will be capped at R3,000 a day or R20,000 a year.