Big fight for medical aids in South Africa

South Africa’s Board of Healthcare Funders (BHF) will take a major fight to court, looking to legally compel the Council for Medical Scemes (CMS) to allow cheaper medical aid plans.

The BHF is a non-profit company representing the interests of over 40 medical schemes, including the biggest in the country, like the Government Employee Medical Scheme (GEMS), BestMed, Bonitas, and more.

The BHF will seek a court ruling that compels the CMS to allow medical schemes to offer Low-Cost Benefit Options or LCBOs.

LCBOs are pared-down medical aid packages that offer beneficiaries essential primary healthcare services at a much lower cost.

The fight to get LCBOs rooted in official policy and regulations has been going on for a decade.

The CMS passed a resolution in August 2015 to adopt a framework for LCBOs offered by medical schemes, but the policy was not implemented due to the lack of support from the National Department of Health.

This was because “they were not comprehensive and did not account for national coverage priorities such as HIV and other diseases”, the CMS said at the time.

The CMS noted in 2022—seven years later—that it was still developing and formulating the guidelines on LCBOs, and by 2023, this process was still ongoing.

However, during this time, medical schemes represented by the BHF grew frustrated and took the CMS to court, accusing it of purposely delaying implementation because of the government’s favoured National Health Insurance (NHI) scheme.

The BHF launched court action against the CMS in 2022 to try and force it to lift what it called a “moratorium” on the LCBO process and compel it to grant exemptions to medical schemes that wanted to offer the plans.

This went through various legal proceedings, ending with the CMS guidelines being finalised and sent to the Department of Health for approval in November 2023.

In April 2024, the exception period for medical schemes to offer the plans was extended for another year, as nothing had been done by the Health Department about the plans.

In May 2024, the National Health Insurance Act was signed into law, two weeks ahead of the national elections.

Next big fight

On Tuesday, 28 January, the BHF will once again head to the courts to try and force the CMS to move on LCBOs.

The board noted that in the CMS and Health Department’s responding affidavits, they cited the delay in implementing LCBOs as due to the government’s NHI rollout.

Ironically, this represents a massive impediment to low-cost healthcare in South Africa, as the NHI Act has not yet been promulgated, and the scheme is not envisioned to be up and running for years if not decades, from now.

The BHF has highlighted this in its application.

“As the BHF, we strongly believe that healthcare is not a future need—it is a current need. Millions of South Africans require solutions today, not years from now,” the BHF said.

“The NHI Act is the subject of several court challenges—including the BHF’s separate case—on the grounds that it is unworkable, unconstitutional and will hinder, not help, South Africa achieve universal health coverage.

“The NHI’s implementation is therefore not a foregone conclusion, and it could take many years to materialise – if it does at all.”

The board added that the National Department of Health’s own timelines reveal that NHI will only be fully implemented from 2028 on.

However, this is likely to take much longer. The NHI’s own developers have admitted that it would take decades to turn a corner on South Africa’s healthcare landscape, and the government is preparing for a legal onslaught.

Meanwhile, LCBOs can be implemented immediately, the BHF said.

“With the stroke of a pen, the CMS could enable more than ten million low-income earners access to essential primary private healthcare services without the state having to cover the costs.”

No compromise NHI

The delays in implementing any healthcare policy that might involve the private sector should come as no surprise, given that the NHI Act intends to do the opposite.

It is not in the government’s interest to promote lower-cost private medical aids when it intends to effectively remove medical aids from the picture under the NHI.

According to section 33 of the NHI Act, once the NHI is “fully implemented,” medical aids will not be able to provide cover for services paid for by the state fund.

It is currently unknown what the government considers “fully implemented”, what the NHI will actually cover, or when the provisions under this section will come into effect.

Despite the unknowns, Health Minister Aaron Motsoaledi has been adamant, explicit and uncompromising on this section being in the laws.

Speaking to Bhekisisa in an extensive interview in 2024, Motsoaledi said that if alternative proposals are put to the government that do not involve reforming financing, it would be a “waste of time.”

Motsoaledi said section 33 is crucial to the NHI, and removing it would be akin to building a house without a foundation—it would simply collapse.

The BHF said that it is trying and willing to work and collaborate with the government on a solution to South Africa’s healthcare problems and moving toward universal healthcare.

But it said that the private and public sectors would have to work together to achieve this—and that allowing medical schemes to offer LCBO is a “practical, impactful solution that could immediately put our country on the path towards achieving this goal”.

This article has been updated to remove reference to Discovery.