The Board of Healthcare Funders (BHF) has applied to the High Court in Pretoria to overturn the moratorium that effectively prohibits medical schemes from providing low-cost benefit options (LCBOs) to South Africans who cannot afford full medical scheme membership.
The Council for Medical Schemes (CMS), the Registrar of Medical Schemes, and the Minister of Health are cited as the first, second, and third respondents, respectively.
The BHF represents most of the country’s medical schemes and healthcare funders, representing schemes and administrators with nearly 4.5 million beneficiaries.
In its application, which was lodged on 8 August, the BHF has asked the High Court to:
- Lift the moratorium preventing medical schemes from providing LCBOs in circumstances where the CMS is refusing to grant applications for exemptions by schemes that will enable them to provide LCBOs, pending the finalisation of LCBO guidelines; and
- Declare that the failure by the respondents to develop and implement the LCBOs guidelines is irrational, unreasonable and unlawful, in terms of section 6 of the Promotion of Administrative Justice Act and section 1(c) of the Constitution.
The respondents have 15 days from the date of receipt of the application to indicate whether they intend to oppose the application.
Since 2016, the CMS has been working on developing a legal framework that will enable medical schemes to offer LCBOs, which would not have to provide all the benefits set out in the Medical Schemes Act – in particular, the prescribed minimum benefits.
Pending the finalisation of the regulatory framework, the CMS has granted exemptions to certain insurers to provide health insurance products that are similar to LCBOs.
In a statement, Dr Katlego Mothudi, the BHF’s managing director, said the CMS’s reluctance to amend the regulations governing LCBOs was “inherently unjust” and “tantamount to the denial of access to quality healthcare services”, as many people who might afford some form of medical cover by defraying certain expenses were being deprived of the opportunity to do so.
Political agenda?
The BHF’s papers filed in the High Court suggest that the CMS’s reluctance was motivated by a political agenda.
“The overwhelming inference is the reason LCBOs have not been developed and implemented is either because of a lack of political will or another political agenda […] It does not suit the [Department of Health], tasked with implementing NHI [National Health Insurance], to have increased membership of medical schemes or for the private sector to deliver a viable low-cost product at the same time as it tries to sell NHI,” the BHF’s head of research, Charlton Murove, said in his founding affidavit.
In his affidavit, Christoff Raath, the joint-chief executive of Insight Actuaries & Consultants, said the most plausible explanation for the lack of progress was that the CMS was intentionally delaying the guidelines to facilitate the implementation of NHI.
“The delays first started to manifest approximately two months prior to the release of the NHI white paper in late 2015. The LCBO framework was approved by the CMS in September 2015, but then suddenly and inexplicably withdrawn in October 2015. It is widely believed this was done on the instruction of the national Department of Health,” he said.
The LCBO process was re-established in 2020, but it “proceeded at a lacklustre pace”, and there was no sign of the process reaching a meaningful conclusion, he said.
At the time of publication, the CMS and the Department of Health had not responded to the BHF’s claims.
BHF: parties should work together
In its statement, the BHF said the state of the country’s healthcare system required all parties to work together in preparation for the implementation of universal health coverage (UHC) through NHI.
“Currently, the state is overburdened, and premiums for medical schemes are becoming unaffordable to many members and prohibitive to prospective members. The proposed solution seeks to pull towards the principles of UHC, to make sure that the healthcare system affords everyone access to quality and affordable health care,” Dr Mothudi said.
“This application seeks to push forward a progressive agenda for the public and private healthcare sectors to work collaboratively to alleviate the current challenges in our healthcare system.
“The CMS and the minister have an important role to play in implementing policies that enable greater access to health care. However, it has been difficult to move forward with the LCBOs, given that the CMS has not taken the necessary steps to implement reform following the publication of demarcation regulations in 2016 in this regard,” Dr Mothudi said.
