Low-cost private medical aid could help lay the ground for National Health Insurance

Finance minister Tito Mboweni recently shared the interim budget and, while there are signs of recovery, the short- to mediumterm financial outlook for SA is not positive. It will undoubtedly take time for our economy to recover and for us to build a thriving economy that employs more of our citizens and creates health and wealth for more South Africans. The health industry needs to support that.

One of the key deliverables of a healthier SA is a National Health Insurance (NHI) system that rectifies some of the imbalances in our health-care sector.

To implement the proposed NHI within the next few years, considering our current fiscal reality, will be extremely difficult, if not impossible. Some commentators have said that the earliest we will see NHI is 2030. SA cannot afford to wait that long and needs a more sustainable healthcare system for more South Africans long before then.

So, how can the private sector support the government in reaching its goal of providing quality health care to more South Africans? How can it provide more efficient health-care solutions to current members of medical schemes, and how can we extend that cover to more employed South Africans? These are really tough questions, but when we come together, South Africans often succeed against the odds.

The private health-care system and its regulators can offer a better environment for improved, more innovative and cost-effective solutions. In fact, many innovative solutions have already been attempted and proposed.

For example, the current health regulations enforce a limited benefit package called the prescribed minimum benefits. PMBs are a set of defined benefits to ensure that all medical scheme members have access to certain minimum health services, regardless of the benefit option they have selected.

Unfortunately, PMBs do not address the fact that even the lowest benefit options offered by schemes remain too expensive for a large portion of the workforce, especially lower-income earners.

We have seen the advent of insurance-based solutions to provide cover for this market, but this type of cover may be better suited if offered in medical schemes.

For this to happen, it’s up to the Council for Medical Schemes, which to date has made very little progress in allowing schemes to offer these types of solutions, hampering the private market’s ability to provide this more affordable solution.

In the past, various medical schemes have had exemptions on certain options that allowed them to offer lower contributions to their members for choosing to use specific health-care providers.

These options were exempt from offering the minimum level of PMBs. The industry is eagerly awaiting approval for this kind of offering in 2020. If that exemption is not allowed, it’s likely that many members will find cover too expensive and opt out of the industry, which is exactly what we are trying to avoid.

We want more South Africans to have affordable cover, and the industry and regulator will need to continue to work together and create opportunities that provide more affordable options for more members, especially in an economy where NHI will take time to materialise. It is perhaps more critical than ever to facilitate a process where the private industry can cover more South Africans over the next decade.

The private sector currently provides these types of health insurance solutions outside medical schemes. Allowing low-cost benefit options within schemes will not only provide more suitable cover for lower-income earners, it will also contribute to the sustainability of medical schemes. Perhaps the most important part of these solutions being offered by schemes is that the government can get a view of what they cost and how to manage them prior to implementing NHI. This would allow the low-cost benefit options to be the start of the basic benefit package.

This sort of trial would be invaluable, since managing these mandatory options at a low price will be critical to the success of universal access. It would be an example of private and public working together to ensure that we can deliver a healthier South African population.

The private sector would offer learning for the government while providing cover to more South Africans, while the economy grows, so that we can afford and implement a successful universal access system for all South Africans.

In so doing, more South Africans would have cover for health in the private market, alleviating the burden on the current and future health system. It can also provide income if some benefits are contracted to state facilities. This would allow more health for more South Africans for less.