Healthcare’s blank cheque safety net pushes up costs

Source: 123RF

“The safety and peace of mind of accessing these services in the private sector remains invaluable to a significant portion of South Africans,” says Craig Comrie, chairman of the Health Funders Association (HFA).

He points out that no one who belongs to a medical scheme, can ever run out of these PMBs, which medical schemes are bound by law to cover.

“Medical schemes belong to members, and part of the deal when you join a medical scheme is that you are covered for these essential services when you need them most – irrespective of how much you have personally contributed to monthly membership fees,” he says.

“Depending on the medical scheme option you are on, you may have access to many more benefits according to your need but be assured that even PMBs offer a reasonably wide set of benefits that members can rely on.”

More than half of medical-scheme members have a monthly household income below R30,000, meaning that accessing private hospitals for major health events without health cover would otherwise be out of reach for many without incurring unmanageable debt. Indications from countries across the world indicate that unforeseen healthcare costs remain the number one reason for personal bankruptcy.

“Medical inflation, driven by both supply and demand, is unfortunately driving up membership costs too, as schemes need to match contribution increases to expected claims. This is exacerbated by regulatory incompleteness, including that there are effectively no price ceilings for providers and that schemes have very limited abilities to manage the variables which result in above inflationary price increases.

“An ageing medical scheme population brings an increased prevalence of chronic conditions and this along with a declining ratio of doctors to care for the population means prices will continue to rise. The long-awaited regulations, such as a mechanism like risk equalisation, can alleviate some of the price pressures on many schemes that carry a higher burden of disease than others.”

The HFA is actively engaging with the Council for Medical Schemes (CMS) on a review of the PMBs, which is required to be done every two years to keep the PMBs relevant to medical needs and improve affordability. “This has unfortunately not taken place yet, and we hope to support this industry initiative to help all scheme members,” he adds.

“Over and above the basic benefit plans options providing for PMB cover, within each medical scheme, the separate benefit options that offer more extensive benefits must be self-sustaining – in a nutshell, this means that the additional cover some members opt for each increase annually and higher claims will likely drive above-inflation increases for 2025,” Comrie says.

“Much as medical schemes may try to keep individual member contribution increases to a minimum, it is the quality of treatment and ease of access to healthcare that people value most. It’s the times when our families are in desperate need, such as being critically injured in an accident, where medical schemes become priceless.

“Hardworking South Africans should be able to access the best healthcare they can afford for their families. However, the current model legislated in the NHI Act threatens to remove this right to coverage rather than expanding it to more people. This could potentially shift the funding obligation from the government’s purse,” he says.

“While we strive to collaborate with the Government on workable solutions that will make access to advanced medical treatments more equitable in the future, medical-scheme funding keeps many healthcare practitioners home in South Africa – and these solutions include creating sustainable investment cases for world-class health facilities such as hospitals, while alleviating pressure on the public healthcare system.

“In contrast to the State’s current roadmap as described in the NHI Act, people accessing healthcare rightfully want the freedom of accessing treatment options where cost-effectiveness is not the only deciding factor. The HFA will continue to protect this right of choice and our desire is to assist more South Africans in benefiting from medical-aid cover until the NHI is equipped to provide a similar quality and breadth of service.

Scheme members are reminded that their benefits are not immediately affected by the NHI Act, which will only be the case once NHI is fully implemented, which by all accounts may be decades away,” Comrie concludes.