Call for input on benefit options
The medical schemes regulator has called for nominations for two advisory committees it plans to set up to devise a framework for low-cost benefit options, products it has said it plans to scrap by March 2021.
The medical schemes regulator has called for nominations for two advisory committees it plans to set up to devise a framework for low-cost benefit options, products it has said it plans to scrap by next March.
The move has puzzled the industry, because the Council for Medical Schemes (CMS) issued a directive in December that overturned a previous agreement reached between the ministers of finance and health that permitted primary health insurance plans to remain in place until a new low-cost benefit regime had been implemented.
Primary-health insurance plans and low-cost benefit options offer less cover than traditional medical scheme packages and require exemptions from the Medical Schemes Act to do so. The CMS’s circular 80 says no exemptions will be granted after March 31 2020.
The CMS published a research note 10 days after it released circular 80, setting out its rationale for the directive.
The CMS is charged with overseeing the R160bn medical schemes industry and protecting the interests of consumers.
The industry is already fighting back against the CMS’s shock move. More than a dozen appeals have been lodged by medical schemes, insurers and the two key associations representing medical schemes and administrators, the Board of Healthcare Funders (BHF) and the Health Funders Association. The BHF is also preparing a legal challenge.
Insight Actuaries & Consultants joint CEO Barry Childs said the CMS should have published its analysis of the sector and consulted the industry before it issued circular 80. Consulting the industry at this stage did not alter the fact that circular 80 effectively scraps primary health insurance products and lowcost benefit options.
“The industry is in a very precarious situation,” Childs said.
The CMS declined to answer Business Day’s questions.
“The advisory committees are created to open conversation among all stakeholders. The CMS, like all participants, will put forward its position during the engagements,” said its spokesperson, Grace Khoza.
The CMS issued a circular on February 21 inviting nominations for two “stakeholder-based” advisory committees to work with it on developing a low-cost benefit option framework by the end of March 2021.
The “insurance stream” is to be chaired by Avril Jacobs and the “administration and funders stream” is to be headed by Michael Willie. Both are CMS employees. The nomination deadline is February 28.
THE ADVISORY COMMITTEES ARE CREATED TO OPEN CONVERSATION AMONG ALL STAKEHOLDERS