NHI will sink medical aids, says health group
The signing of the National Health Insurance (NHI) Bill into law by President Cyril Ramaphosa could result in medical aid members opting out of schemes — a move that would make medical aid even more unaffordable for the average South African, the Board of Healthcare Funders has warned.
Charlton Murove, the board’s head of research, said the dwindling number of young and healthy people joining medical aids was already hurting the current business model where the young subsidise the old and sick.
While health insurance products, which are often sold as an alternative to medical scheme cover, are major drivers for many opting out of medical aids, Murove cautioned that under NHI medical aid cover would become more expensive.
“There is a risk that once the bill is signed into law a lot of beneficiaries and the population will believe there is free access to health care for all. The reduced membership of young, healthy people reduces cross-subsidisation in medical schemes, making contributions more expensive.
“The more expensive contributions are, the less affordable schemes are ... and young healthy lives are discouraged from joining schemes. It’s a vicious circle which is unsustainable for medical schemes.”
NHI, which aims to reform the country’s unequal two-tier health-care system, was brought one step closer to realisation this week when the controversial bill was adopted by the National Council of Provinces (NCOP) despite an outcry from the business sector, medical schemes and medical associations.
The bill will now be submitted to the president, who is likely to sign it into law and kickstart the process of establishing the NHI fund proposed by the bill. The draft legislation proposes a single state-run medical fund that will purchase health services on behalf of all patients from public and private sector service providers.
The country’s largest open medical scheme, Discovery Health, said the industry was already under pressure due to tough economic times.
“The low number of young members joining medical schemes is due to the challenging economic climate characterised by high youth unemployment rates,” said Discovery Health CEO Ryan Noach.
Young and healthy people were likely to prioritise living expenses over medical insurance.
Some critics of the scheme argue that a government-run fund would be open to the corruption that’s been seen in state-owned enteprises such as Eskom, Transnet and South African Airways.
But the health department’s deputy director-general for the NHI, Nicholas Crisp, said the payment approaches the fund would use were transparent and efficient, which would make it difficult to defraud.
Crisp said given the competency and success of other health sector Schedule 3A entities such as the South African Medical Research Council and the South African Health Products Regulatory Authority, it was unfair and premature to label the fund as all bad.
“Most concerns are premature. As has been repeatedly stated, the regulations will clarify many issues in this enabling legislation. To criticise an agency that has not yet been established, let alone operationalised, is definitely premature.”
One of the controversial aspects of the bill is section 33, which states that medical schemes may only provide cover that “constitutes complementary or top-up cover and does not overlap with the personal healthcare service benefits purchased by the NHI”.
Many have said this would reduce the role of medical schemes to that of gap cover, which provides for the shortfall when doctors and specialists charge above normal medical aid rates.
Lee Callakoppen, principal officer of Bonitas Medical Fund, said what is worrying about the implementation of NHI is the lack of detail regarding its funding model and the scrapping of medical aid.
Crisp said the health department was working on draft regulations for governance.
“All regulations must be published for three months and then amended based on public comments before the minister can use them and proceed with processes to appoint a board. This whole process may take nine to 12 months.”