Momentum Health Solutions says up to six million low-income workers could afford basic private healthcare services, which would reduce pressure on the public health sector, if medical schemes were permitted to offer low-cost options, reports Business Day.
The Council for Medical Schemes started work more than seven years ago on developing a legal framework to enable schemes to offer low-cost benefit options (LCBOs). LCBOs will not have to provide the expensive prescribed minimum benefits.
In August last year, the Board of Healthcare Funders applied to the High Court to overturn the moratorium that effectively prohibits medical schemes from providing LCBOs.
Read: CMS must provide BHF with a complete record of decisions on low-cost benefit options
Business Day quoted Damian McHugh, the executive head of marketing at Momentum Health Solutions, as saying there was demand for low-cost options from low-income workers and employers.
Membership of the administrator’s health insurance product, Health4Me, grew by 14% in the year to June 30, to reach 184 168 lives, he said.
About one million low-income workers are now covered by health insurance products, offered by 12 licensed providers operating in the open market, along with schemes restricted to people working in the road freight and security industries, he said.
Growth in the health insurance market contrasted with the medical scheme industry, where the number of beneficiaries has stagnated to slightly less than nine million, McHugh said.
“If we can get the benefit set and pricing applicable to lower-income individuals who are formally employed, we will alleviate the burden on the state,” McHugh was quoted as saying. “This is not in conflict with NHI [National Health Insurance] – it will enable NHI to happen even faster.”
News24 quoted McHugh as saying the government would not have to raise additional taxes to fund the initial rollout of the NHI if the private sector was allowed to expand low-cost health insurance.
The initial phase of NHI will focus on primary health care. Momentum’s calculations show that allowing medical schemes to provide low-cost benefit options during this stage would negate the need to raise additional taxes.
The subsequent phases, when NHI starts providing benefits for hospitalisation and specialist doctors, will likely require additional taxes, McHugh was quoted as saying.
Need for private sector expertise
Momentum Health Solutions believes the state does not have to kill the private sector to achieve universal healthcare coverage.
One of the reasons Momentum advocates for the preservation of the private sector under NHI is the extent of the administration that will be required to manage the NHI Fund.
Momentum Health Solutions processes healthcare claims of about R1.2 billion a month, and it estimates that its share of the medical schemes market is about 20%. If it is assumed that the remaining 80% of the market also processes R1.2bn of claims monthly, that’s R6bn. And if one extrapolates from the 9 million people covered by medical schemes to South Africa’s population of 60 million people, the volume and value of transactions to be processed each month spikes significantly.
“The governance of that is such an important component – the rules around how you manage it. And then, in South Africa, we obviously have the question of corruption. [Given] the rules, technology, the science, and expertise that exists in managing a national healthcare fund of South Africa, you can’t afford to lose one expert,” McHugh was quoted as saying.
He said expertise in the private sector was as important as keeping doctors and nurses in the country to make NHI a success.
