Cabinet approves bill to regulate medical schemes

Cape Town – A bill to regulate medical schemes which aims to benefit members was approved by Cabinet.

At a post-Cabinet briefing on Thursday, Communications Minister Nomvula Mokonyane announced that the Medical Schemes Amendment Bill will be published in the government gazette for public comment.

The bill amends the Medical Schemes Act No 131 of 1998 to align with the National Health Insurance White Paper and the Draft National Health Insurance Fund Bill, Mokanyane said.

“It seeks to improve the regulation of the medical schemes industry and to align the regulatory framework to the changes that have taken place over the past decade in the sector.

“The bill will also ensure that beneficiaries are better protected and promotes better access to private health funding,” she explained.

Partner at law firm Hogan Lovells Ian Jacobsberg told Fin24 by phone last week that according to his understanding, the bill proposes to regulate medical schemes in such a way that co-payments for healthcare will be eliminated.

No payment gap for members

“The medical practitioners will have to charge according to negotiated rates and the medical aid scheme will have to cover the full costs.” Essentially there will be no payment gap for members.

Mark Arnold, principal officer of Resolution Health Medical Scheme, also shared views of the proposed scheme in a statement issued earlier this week. He noted that legislative steps to address healthcare costs rising higher than inflation were overdue.

“This is an important step towards protecting healthcare consumers,” he said.

Currently there aren’t regulations in place to limit how much healthcare providers can charge consumers.

Further, medical schemes have to individually negotiate rates with healthcare providers. Considerably larger medical schemes then have “more bargaining power” than the rest of the industry, according to Arnold.

“The consequence of this is that healthcare providers make up for the discounted rates they have acquiesced to with the large schemes by demanding higher fees of the smaller schemes.”

Arnold also shared thoughts on proposed co-payments. Schemes often limit co-payments as far as possible, but they are generally higher for elective surgical procedures.

“Limits on claims for elective procedures are in place particularly where more conservative means of treating the condition, such as physiotherapy, are available.

“Here the co-payments charged for such procedures are in place to protect the funds available for claims that are truly a medical necessity. Here, co-payment should, in theory, encourage members to consider alternatives to elective surgery,” he explained.

But if co-payments on elective procedures are scrapped, this could open up risk for the majority of members in favour of a few, he suggested.

“This is because if procedures are covered in full by law, then healthcare providers may be encouraged to prescribe more costly treatment rather than choosing more conservative options that are less profitable.

“The average medical scheme member may welcome the prospect of co-payments being eliminated. However, the wider implications must be considered,” he warned.

Arnold in turn proposed that a list of treatments that co-payments can be charged for be determined, to protect funds available to cover the entire membership of the medical scheme.

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