The end of medical aid as you know it in South Africa
The revised National Health Insurance (NHI) Bill published on Thursday (8 August) shows that there is little space for medical aid schemes as we currently know them in South Africa.
While minister of Health Dr Zweli Mkhize had previously hinted that medical schemes would play a secondary role to the incoming NHI, the revised bill shows that there may be little room for these multi-billion rand companies to manoeuvre under the new system.
While the 60-page bill goes into detail in a number of areas, just one sentence is dedicated to ‘the role of medical schemes’ under the new system.
Section 33 of the bill states that:
Once National Health Insurance has been fully implemented as determined by the minister through regulations in the gazette, medical schemes may only offer complementary cover to services not reimbursable by the fund.
In effect, this means that medical schemes will simply not be able to offer members cover for services which are already covered by the NHI.
This echoes statements made by the director general of the NHI, Anban Pillay, in July, where he said that it would be inappropriate for the state to legitimise buying cover for services that are already covered by the NHI.
As an example, he questioned why people would want to pay for the services of a private GP, when the state already covers that cost.
While the bill makes it clear that medical aids will not be able to cover the same services as the NHI, it does not specify what it is exactly that the NHI covers.
According to Pillay, the industry regulator, the Council for Medical Schemes, will make it clear what is covered by medical aid, and what is not. This will be revised on a regular basis, as the services offered under the NHI will evolve over time.
“Under the bill, medical aid schemes will gradually be phased out until they ultimately cease to exist,” said chairperson of the Portfolio Committee on Health, Dr Sibongiseni Dhlomo.
“Once fully implemented, the NHI will cover all health services with exception of services highlighted as complementary cover.
“Complimentary cover which will include health services such as cosmetic healthcare will be covered by medical aids,” he said.
Big money
According to the latest annual report from the Council for Medical Schemes (CMS), all medical aid schemes pull in R162.9 billion in contributions, while paying out R144.5 billion in relevant healthcare costs.
After accounting for administration costs, broker fees and other impairments and losses, the industry is left with a net surplus of R8.92 billion.
According to the group, Discovery has the largest medical aid scheme by some measure with 2.747 million beneficiaries, followed closest by the Government Employees Medical Scheme (GEMS) with 1.8 million beneficiaries – the biggest restricted scheme in the country.
But when it comes to total contributions, Discovery members aren’t the ones paying the highest average in the market.
Discovery members paid a total of R48.7 billion in contributions in 2017, which averages at around R1,477 per beneficiary per month (R3,100 per member per month). Of the 21 open schemes, this places Discovery on the more affordable side (ranking 14th, overall).
This is also below the average for open schemes (R1,544 per month), and below the average for the entire medical aid scheme industry (R1,535 per month).
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