EDITORIAL: Medical schemes regulator should stop throwing its weight around

The aggressive attack by the Council for Medical Schemes (CMS) on industry players for ostensibly jumping the gun by publicising their plans for 2024 before regulatory approval is entirely misplaced.

For the past two decades medical schemes have consistently announced their intended contribution increases and benefit changes for the next year in or around September, to give consumers, financial advisers and employers time to consider their options before changes take effect in January.

The myriad options offered by SA’s more than 70 medical schemes are complex and difficult to compare, and beneficiaries face potentially severe financial consequences if they get it wrong. Medical schemes say they make it clear their plans are subject to approval by the CMS, but since it is extremely rare for the regulator to reject any of them, the market quite reasonably banks on the proposed benefit options and premiums coming into play.

Earlier this month, the CMS’s then-acting registrar, Zongezile Baloyi, stunned SA’s five biggest open medical schemes with a “cease and desist” letter, directing them to withdraw all communication about their 2024 products and threatening to fine them if they didn’t. They would have to wait, he said, until the CMS finalised its scrutiny of their plans, which it would do by end-November.

He set his sights on Discovery Health Medical Scheme, Bonitas, Momentum, Bestmed and Medihelp, which between them cover most of the open market, saying their actions were confusing consumers and not in their best interest. Curiously at least two other schemes that had also gone public with their 2024 plans, Profmed and Camaf, were not in the regulator’s sights.

Shortly after these events were exposed in the media, with several medical schemes pointing out that it would clearly be detrimental to consumers, brokers and employers if they were deprived of timely information, the CMS back-pedalled and said schemes just needed to make it clear to everyone that their plans were subject to regulatory approval. 

None of his should have happened in the first place. Instead of tilting at windmills, the CMS should be tackling the real problems confronting the industry, of which there are many. For starters, it could compel schemes to simplify and standardise their benefit options so consumers could easily compare them.

It could also move to close the coverage gaps in the prescribed minimum benefits, which are outdated and make shamefully inadequate provision for mental healthcare. And for a more comprehensive to-do list it need look no further than the recommendations of the Health Market Inquiry, which spent five years investigating the barriers to effective competition in the private healthcare market and how they hampered patients’ access to care. The inquiry released its final report in 2019, and none of its far-reaching recommendations have yet been implemented.

The CMS has a statutory obligation to safeguard the interests of the 8.95-million people who belong to medical schemes. Rather than throwing its weight around, it should dust off the inquiry report and put its advice into play.