The failure by the Council for Medical Schemes (CMS) to review the prescribed minimum benefits (PMBs) regularly is making private healthcare unaffordable for millions of people, according to the Board of Healthcare Funders (BHF).
The BHF was responding to the media statement issued by the CMS earlier this week. In it, the regulator’s chief executive and registrar, Dr Sipho Kabane, took exception to comments by Insight Actuaries & Consultants joint-chief executive Christoff Raath at the BHF’s recent annual conference.
Read: CMS to take action against actuary over comments about low-cost benefit options
In its response, the BHF also voiced concern about the inability of its members to provide low-cost benefit options (LCBOs).
The BHF is the biggest representative body of the private healthcare funding industry, representing medical schemes, administrators and managed-care organisations in sub-Saharan Africa.
PMBs ‘are out of date’
Charlton Murove, the head of research at the BHF, said that contrary to what the CMS asserted, the BHF does not want to do away with the PMBs.
The problem is that beneficiaries are forced to buy the current PMB benefits, “which are inefficient, expensive, outdated and in much need of a review”, he said.
“We realise that PMBs are an important pillar in terms of protecting beneficiaries. However, the issue is that the PMBs are meant to be reviewed every two years, and the CMS has not done so in a very long time. The failure by the CMS to review the PMBs has created a barrier to entry and rendered access to private healthcare prohibitively expensive for millions of people,” said Murove.
He said the last significant review of the PMB was in 2003, and it was only in 2020 that the regulator effected a slight change to the PMBs by including Covid-19.
‘No real commitment’ to finalising LCBOs
The BHF said insurance companies were allowed to provide customised low-cost benefits at affordable premiums, whereas the CMS’s regulations prohibited medical schemes from offering similar products.
“The refusal by CMS to grant exemptions to medical schemes continues to perpetuate the current problem of access that we are experiencing in health care. At the moment, there appears to be no real commitment to solving the problem, but instead a deliberate effort by the regulator to delay the process,” Murove said.
The BHF was not proposing the cancellation of the exempted insurance products. Instead, it wanted the CMS to allow medical schemes to provide similar products – in other words, LCBOs through the same exemptions granted to insurance products, Murove said.
“Medical schemes are not-for-profit entities and can provide LCBOs at a much lower rate than insurance companies, which are driven by profits.”
Insurance companies have been approved to provide these services, which medical schemes have for years been requesting permission from the CMS to provide, and there was “no rationale for the regulator’s lack of approval”, said Murove.
According to Murove, the BHF believed that medical schemes were optimally positioned to offer these benefits, because schemes have the infrastructure and know-how.
“If the schemes had been offering this product from the inception of the demarcation regulations in 2017, medical schemes would have moved forward, as they are geared for this anyway.
“The type of cover that would be provided by the medical schemes will be more standardised and richer than the current offerings in the market being provided by insurers, which do not necessarily operate in a specialised healthcare sector.”
Furthermore, the beneficiaries of these products would benefit from the medical tax credits (where they are eligible) if they bought into a LCBO through a medical scheme, whereas policyholders of these insurance products cannot access the tax credit.
The disagreement over the number of people who could be brought into the private healthcare system through LCBOs was “a side issue”, Murove said.
“For us, it does not matter how many people it is. The issue is that there are lives that are being impacted by the lack of movement by the regulator to exempt medical schemes from the provision of LCBOs.
“For the CMS to raise a debate around this is to make the problem smaller than what it is; the real problem is the regulator’s inactivity around this issue,” Murove said.
