Aaron Motsoaledi. Picture: BUSINESS DAY
Aaron Motsoaledi. Picture: BUSINESS DAY

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 copayments, a move that could prove a game changer for the industry and consumers.

The changes are contained in the Medical Schemes Amendment Bill.

Motsoaledi says the new rules on benefits, prices and governance will give consumers a better deal. But the devil will be in the detail, and the industry is waiting with bated breath for the gazetting of the bill.

It is clear, however, that the bill seeks to improve the regulation of the medical schemes industry and align the regulatory framework to the changes that have taken place over the past decade.

In relation to giving the consumer a better deal, a further primary aim of the bill is to regulate medical schemes in such a way that copayments for healthcare will be eliminated and that a uniform tariff structure for healthcare providers can be implemented.

A FURTHER PRIMARY AIM OF THE BILL IS TO REGULATE MEDICAL SCHEMES IN SUCH A WAY THAT COPAYMENTS FOR HEALTHCARE WILL BE ELIMINATED.

This sounds positive but might have unintended consequences. For example, copayments charged for certain procedures are in place to protect the funds available for claims that are truly a medical necessity. They are a risk management tool.

In such circumstances, copayments should encourage members to consider alternatives to these elective procedures. If copayments on elective procedures are scrapped, this could open up risk for the majority of members in favour of a minority.

As for the proposed uniform tariff for healthcare providers, the details of how these will be arrived at are still unclear at this stage. There was speculation that the tariffs would not be tackled in the Medical Schemes Amendment Bill, but rather by the outcome of the Competition Commission’s health market inquiry. If a sustainable model can be identified, it will be an important step towards protecting healthcare consumers.

With regard to the smaller medical aid schemes and how the legislation will affect them, there have been suggestions that the smaller schemes should be disbanded and incorporated into the bigger schemes. However, this is something that needs to be managed in legislation as the Medical Schemes Act allows a scheme to be registered if it has 6,000 or more members.

Amalgamation of the smaller schemes is also a possibility. The National Health Insurance (NHI) proposals envisage a single system, with an option for the wealthy to buy additional cover.

However, the payroll tax that is likely to be introduced to fund the NHI will make people consider whether the additional cost of medical scheme membership is worth it. This could have a devastating effect on smaller schemes, as they will play a role in filling the gap.

The NHI envisages a public-private partnership, and the private sector would surely have to come to the party to help with the development and successful implementation of the scheme.

With the Medical Schemes Amendment Bill in the final stages and NHI on the go, SA needs the best skills from the private sector to contribute to helping the public sector ensure an outcome that leads to a better life for all South Africans.

We don’t have to reinvent the wheel with the NHI, we just have to make use of the lessons learnt in the private sector. This could set the stage when the NHI is implemented for a public-private partnership that can actually work. The private sector has the knowledge that can shape the NHI to the benefit of not only the public sector but also the private sector. They need to work together.

Ferreira is chief legal and compliance officer for African Unity Life.

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