Calls to include Health Market Inquiry findings in new medical aid regulations

Health Minister Dr Aaron Motsoaledi should withdraw the Medical Schemes Amendment Bill, until the Competition Commission finalises the Health Market Inquiry, according to Andre Jacobs, an executive at ASI Financial Services.

There are currently three key documents affecting the healthcare sector in South Africa, the National Health Insurance (NHI) Bill and the Medical Schemes Amendment Bill published for comment in June and the Health Market Inquiry preliminary report released on July 5.

The preliminary report of the four-year investigation into the private healthcare sector, by the Competition Commission found that the market “displays consistently rising medical scheme premiums accompanied by increasing out-of-pocket payments for the insured ... and a progressively decreasing range of services covered by medical scheme options."

Stakeholders in the private healthcare sector and the public have until September 7 to comment on the 800-page report and the Health Market Inquiry will then consider all representations and publish the final report by the end of November.

Jacobs said that the comment period for the Medical Schemes Amendment Bill ends on September 20 and this will prevent relevant sections from the Health Market Inquiry’s final report being included in the bill and could duplicate the process.

Mark Arnold, Principal Officer of Resolution Health Medical Scheme warned of the timing clash between the Health Market Inquiry and the amendments to the bill regulating medical schemes.

“There is significant risk that the regulatory environment being created through the legislative amendment process currently underway could conflict with the lessons learned in the course of the HMI’s work, which will only be fully apparent on the release of its final report,” Arnold said in a statement on Friday.

The Medical Schemes Amendment Bill proposes an end to co-payments by the client and the medical aid for healthcare services, increased cross subsidisation of members across age groups and income levels as well as the barring of medical aid brokers. 

Arnold questioned why the work of the Health Market Inquiry, which was the “most comprehensive assessment of the private healthcare sector ever undertaken in our country” was not being considered by the bill amending medical schemes.

The Health Market’s preliminary report found that despite SA consumers having 22 open medical schemes to choose from, just two dominate the market. Discovery Health has nearly 55% of the market, while Medscheme is a close second.

The inquiry also stated that there was a lack of players in the private hospital sector with just three groups-  Netcare, Mediclinic and Life Healthcare — holding a combined market share of 83%, which disadvantaged patients.

Fin24 previously reported that financial services company GTC in its eighth annual Medical Aid Survey found that the subscriptions for members are outstripping salary increases.

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