Medical schemes regulator says it's in talks over low-cost benefit ban as pushback heats up

The Council for Medical Schemes says it is holding talks with industry stakeholders as pushback against the proposed end to low-cost benefit options heats up.

It also says it has established "advisory committees" to address challenges the various stakeholders face, as no engagement took place before the regulator issued the circular announcing the ban in December.

But a group of stakeholders predominantly representing low-income workers who say they will be heavily impacted by the closure of LCBOs say they have been excluded from the process.

The establishment of these committees – which will also develop a road map leading up to the deadline for phasing out LCBOs – comes after some industry representatives lodged appeals challenging the regulator's decision.

The Council for Medical Schemes announced in December that low-cost benefit options, generally primary health care plans aimed at low-income earners, would not be provided beyond March 2021. The regulator said some offered "inferior benefits" and sent members to state facilities without entering into the necessary agreements with the relevant public hospitals.

Last Thursday, the abovementioned group – which says it has been excluded – marched to the regulator's headquarter in Pretoria.

The group has established a movement called #HANDSOFFLCBO, consisting of civil and non-profit organisations who signed the memorandum demanding the reversal of the CMS' decision to phase out these health insurance products.

However, they were not able to present their memorandum as the registrar, Dr Sipho Kabane, was not available.

The group said they plan to return to the CMS offices this Thursday, having been promised that Kabane will be there.

In a new circular on LCBO, the CMS recently said it had had extensive consultation with key stakeholders in the healthcare and insurance sectors, including the Board of Healthcare Funders, the Health Funders Association, medical schemes and their administrators, as well as insurers.

The National Treasury and the financial services regulators, the Financial Sector Conduct Authority and the Prudential Authority have also weighed in on the proposed closure of LCBOs.

As for the appeals, the CMS said these would be dealt with internally.

"The registrar cannot be seen to be interfering in the independent legal proceedings. For this reason, we cannot disclose who has appealed or on what grounds.

"We continue consulting with respective stakeholders as part of our engagement with the industry on Circular 80 and 82," said CMS general manager of stakeholder relations, Grace Khoza, in response to questions from Fin24.

The two stakeholder-based advisory committees the CMS announced in the new circular will look at product shortcomings by some LCBO providers; develop a road map leading to 31 March 2021 – the proposed D-date for LCBO closures; and provide input into a framework that will eventually be submitted to the minister of health for approval.

For its part, the healthcare stakeholder forum task team behind the #HANDSOFFLCBO movement still maintains the CMS has chosen to exclude workers and community organisations in the establishment of the advisory committees and wants them represented, arguing that they would be most affected by the withdrawal of LCBOs.

"We will be going back on Thursday because the regulator has refused to engage community organisations," said Kerry Hertog of RH Bophelo Insurance, who was part of the group that visited CMS last week.

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