JLT South Africa Unpacks the Medical Schemes Amendment Bill

02 July 2018

On the 22nd of June 2018, JLT provided you with our view on the press release by Health Minister Dr. Aaron Motsoaledi regarding the proposed changes to the National Health Insurance (NHI) Bill and the Medical Schemes Amendment (MSA) Bill.

Following Dr. Motsoaledi’s address, the Bills were released for public comment. JLT’s preliminary review of the MSA Bill already noted inconsistencies between what the Minister announced during his press release, and what is contained within the Bill. After examining the proposed Bill, JLT identified several key contradictions which we’ve unpacked below.

1. Abolishment of co-payments

The Department of Health were of the view that Medical Schemes have reserve levels in excess of the statutory requirements, therefore medical costs should be paid in full. According to the proposed amendments, co-payments will be removed for a defined list of ‘comprehensive service benefits’.

2. Prescribed Minimum Benefits (PMB’s)

Dr. Motsoaledi’s press address made mention of the removal of PMB’s in favour of a list of ‘comprehensive service benefits’. The ‘comprehensive service benefits’ will include primary health care services such as family planning, vaccinations, screening, and wellness services. Additional details of the benefits included in this list have not been provided in the Bill.

3. Unequal benefit options

Dr. Motsoaledi stated that Medical Schemes are subjecting their members to unfair and unequal benefit options and advised that the Bill will prevent any Medical Scheme from registering a benefit option unless approved by the Registrar of the Council for Medical Schemes. Provision for this has been made in the Bill.

4. Role of brokers

The MSA Bill still makes mention of and provision for brokers within the Medical Scheme environment. The Bill contains three changes defining the role of brokers, broker fees and broker services. This is in direct contradiction to Dr. Motsoaledi’s statement that brokers would be abolished.

5. Penalties for non-registered Medical Schemes

Dr. Motsoaledi advised that any entity carrying on the business of a Medical Scheme but not registered as such will be seen as an offence. The Bill makes provision for this proposed amendment and includes the penalties that may be imposed on such an entity.

6. Central registry

The provision for a central beneficiary and provider registry was included in both Dr. Motsoaledi’s press release as well as in the MSA Bill. The Council for Medical Schemes will be responsible for the management of the central registry.    

7. Income cross-subsidisation

The MSA Bill proposes that contributions must be determined based on income, allowing the wealthy to subsidise the poor. This corresponds with the Minister’s address.

8. Network discounts

Medical Schemes must “pass back” savings to members if they make use of a designated service provider. Though mentioned in the press release, this is already in place within Medical Schemes through their network-based options which provide for lower monthly premiums.  The Bill makes provision for a discount on the monthly contribution should the member use a designated service provider.

9. Cancellation of underwriting

Dr. Motsoaledi stated that waiting periods and late joiner penalties would be removed in an attempt to protect spouses of deceased members. The provision in the Bill refers to the cancellation of memberships for a period not exceeding six months. In its simplest form, the Bill states that underwriting will not be applied if the break in cover is for a period less than six months, after which underwriting will be applied.

10. Medical Scheme Governance

The amendment in the Bill clearly defines the minimum education requirements, roles and responsibilities for members of a Medical Scheme Board, as well as corporate governance requirements of the Board of Trustees. This mirrors Dr. Motsoaledi’s address.

IN CONCLUSION

Prior to the press release, Dr. Motsoaledi cautioned South Africans to expect a hurricane. The proposed changes in the MSA Bill will certainly have an impact on the industry and the future of healthcare in South Africa as we know it.

Our view is that the proposed changes in the MSA Bill are in preparation for the implementation of National Health Insurance; however sufficient detail is not included in the MSA Bill to understand the full impact of these changes. While we see universal healthcare for all as necessary, the process to achieve this brings with it numerous challenges that need to be overcome, which in itself could be a lengthy process.

Over the coming weeks JLT will be unpacking the MSA Bill in its entirety. Join us on our journey as we delve deeper into the South African healthcare landscape.


GENERAL ENQUIRIES

James Hine

Chief Commercial Officer

E: James_Hine@jltgroup.com

T: +27 (0)11 361 0000