Insurance and health experts have slammed a new plan by the Council for Medical Schemes (CMS) to scrap smaller medical aids.
This after the CMS announced it would consolidate or dissolve small medical schemes with the aim of bringing the industry in line with the incoming National Health Insurance (NHI) regulations.
According to the new regulations, medical schemes with fewer than 6,000 principal members will no longer be allowed to operate within the country.
These changes are likely to affect more than 228,000 people which belong to these smaller schemes, according to a report by BusinessDay. Notably, the majority of this number are South African employees who enjoy benefits as part of their employer group, as well as a number of subsidised costs.
Speaking to BusinessDay, CMS acting registrar Sipho Kabane confirmed that the changes were made to bring medical aids in line with the NHI white paper.
He noted that consolidation was necessary because fragmented risk pools were expensive and limited the scope for cross-subsidisation.
“It isn’t just about noncompliance [with the act]. This is just the beginning. In NHI, we will have one risk pool: from 83 medical schemes in SA, we will consolidate into one.”
“We are going through a consultative process, to come up with a clear mandate on how this will be achieved,” said Kabane.
The changes are expected to be met with a number of legal and constitutional challenges.