SA’s CMS hopes to finalise laws by 2023
Low-cost medical aid
The percentage of people covered by medical schemes has decreased from 16% in 2000 to 14.86% in 2021.
The Council for Medical Schemes (CMS) says it is closer to finalising low-cost benefit option (LBCO) regulations - the absence of which have prevented medical schemes from offering cheap medical aid options since 2016.
The CMS has been reviewing the LBCO guidelines since 2015, and according to the medical schemes representative body, the Board of Health Funders, the regulator has refused to grant its exemptions to continue selling these products since 2016.
In December 2019, the CMS announced plans to disallow LCBO altogether by the end of March 2021. But the industry pushed back, and the CMS extended the shelf life of these products up to 31 March 2024.
During the presentation of the medical schemes industry report, CMS executive manager for research policy and monitoring, Michael Willie, said the regulator expected to finalise all public engagements on the matter this December and make its final submissions to the health minister in the first quarter of 2023.
The CMS issued circular 53 in September, requesting public comment. Willie said many stakeholders indicated that they'd still need to engage their constituencies and therefore needed the CMS to extend the deadline for comments. So while the CMS was initially set to close the comments period on 7 October, it has now pushed that to the end of November.
"We realised that there are many interested stakeholders in this piece of work. This is the final leg of engagement of all the interested parties," said Willie.
He added that the CMS appreciated the urgency, since the industry had been awaiting clarification for years.
Options
As the medical schemes industry has been waiting for the guidelines and is unable to sell these cheaper options, insurers have swooped in to launch similar products to cater for the millions of South African consumers who cannot afford medical aid. Since these products typically don't provide private hospitalisation and prescribed minimum benefits such as cancer care and some chronic medications, they usually cost a few hundred rand per month and have found a hugely receptive market in SA.
Willie said, however, that these insurers are operating outside the demarcation regulations.
The regulations sought to prevent insurers from conducting the business of medical schemes. It deemed all primary healthcare insurance and hospital plans to encroach into medical schemes' business. They came into effect in April 2017, but insurers were allowed to apply for exemptions while the regulator worked on finalising the LCBO framework. The exemption period has been extended a couple of times and by a further two years earlier this year to 31 March 2024.
Meanwhile, while the demand for these cheaper options has been growing, the number of people covered by medical schemes in SA has remained stagnant for the past decade. The percentage of people covered by medical schemes has decreased from 16% in 2000 to 14.86% in 2021.-Fin24
The CMS has been reviewing the LBCO guidelines since 2015, and according to the medical schemes representative body, the Board of Health Funders, the regulator has refused to grant its exemptions to continue selling these products since 2016.
In December 2019, the CMS announced plans to disallow LCBO altogether by the end of March 2021. But the industry pushed back, and the CMS extended the shelf life of these products up to 31 March 2024.
During the presentation of the medical schemes industry report, CMS executive manager for research policy and monitoring, Michael Willie, said the regulator expected to finalise all public engagements on the matter this December and make its final submissions to the health minister in the first quarter of 2023.
The CMS issued circular 53 in September, requesting public comment. Willie said many stakeholders indicated that they'd still need to engage their constituencies and therefore needed the CMS to extend the deadline for comments. So while the CMS was initially set to close the comments period on 7 October, it has now pushed that to the end of November.
"We realised that there are many interested stakeholders in this piece of work. This is the final leg of engagement of all the interested parties," said Willie.
He added that the CMS appreciated the urgency, since the industry had been awaiting clarification for years.
Options
As the medical schemes industry has been waiting for the guidelines and is unable to sell these cheaper options, insurers have swooped in to launch similar products to cater for the millions of South African consumers who cannot afford medical aid. Since these products typically don't provide private hospitalisation and prescribed minimum benefits such as cancer care and some chronic medications, they usually cost a few hundred rand per month and have found a hugely receptive market in SA.
Willie said, however, that these insurers are operating outside the demarcation regulations.
The regulations sought to prevent insurers from conducting the business of medical schemes. It deemed all primary healthcare insurance and hospital plans to encroach into medical schemes' business. They came into effect in April 2017, but insurers were allowed to apply for exemptions while the regulator worked on finalising the LCBO framework. The exemption period has been extended a couple of times and by a further two years earlier this year to 31 March 2024.
Meanwhile, while the demand for these cheaper options has been growing, the number of people covered by medical schemes in SA has remained stagnant for the past decade. The percentage of people covered by medical schemes has decreased from 16% in 2000 to 14.86% in 2021.-Fin24
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