Regulator rebuffed in low-cost medical cover case

The Supreme Court of Appeal has dismissed an application from the medical schemes regulator to appeal against a high court directive to provide the Board of Healthcare Funders (BHF) with documents on low-cost benefit options (LCBOs), saying it has no reasonable prospect of success.

LCBOs are cheap, pared-down medical scheme options that may be offered by schemes only if they are granted an exemption to the Medical Schemes Act by the Council for Medical Schemes (CMS).

Proponents of LCBOs say they could potentially provide primary healthcare cover for millions of low-income workers who cannot afford traditional medical scheme options offering a greater set of benefits.

“While this legal outcome is a victory for the BHF, it is essential to underscore our dissatisfaction with the apparent delay tactics employed throughout this process. These delays hinder the timely implementation of much-needed affordable medical aid options,” said BHF head of research Charlton Murove.

The appeal court decision, handed down on December 18, is part of a legal battle between the BHF and CMS that began when the association took the regulator to court in 2022 for allegedly stalling the implementation of LCBOs. The CMS began developing a regulatory framework for LCBOs in 2015 but submitted its final report to health minister Joe Phaahla only in November 2023.

The BHF alleges the CMS refused to consider new exemption applications from medical schemes while it developed the framework, yet continued to allow a closed group of health insurers to continue selling primary healthcare cover products that effectively do the same thing. The BHF asked the court to review and set aside the CMS’s latest extension to the exemption granted to health insurers; its moratorium on medical schemes offering LCBOs; and its refusal to consider exemption applications from schemes wishing to do so, pending the finalisation of the framework.

To supplement its argument in its review application, the BHF asked the CMS to provide all its records on LCBOs.

Dissatisfied with the CMS response, the BHF obtained a high court order in July 2023 compelling the regulator and the health minister to hand over the full record of their decisions on LCBOs. When these documents were not provided, the BHF launched contempt of court proceedings against both parties. The health minister settled with the BHF and provided the records it sought, but the CMS fought back, taking the matter all the way to the appeal court. Its application for leave to appeal was heard on December 13 and dismissed with costs.

CMS spokesperson Stephen Monamodi said the regulator is applying for a reconsideration of the appeal court decision to dismiss its appeal. “The CMS believes that it has provided BHF with all required and relevant documents to prosecute their review application. More so, the CMS has completed the LCBO report and submitted same to the minister of health.”

kahnt@businesslive.co.za