Low-cost benefit option may help

THE Council for Medical Schemes (CMS) has rightfully indicated that the introduction of the low-cost benefit option (LCBO) should complement the roll-out of the NHI by expanding private health-care coverage and making it affordable to more people.

This is according to the chief executive officer of the Health Funders Association (HFA), Phumelele Makatini. She said a slimmed-down list of covered conditions focused on the most common and pressing health concerns, with a strong emphasis on preventive and primary health care, could meet most families’ health needs.

She said the complexity of the NHI project was immense, and the tax base to fund it was narrow. There will, therefore, need to be gradual steps towards addressing practical implications for society sustainably.

Makatini further noted that medical schemes had felt the pressure of increased claims since the pandemic, and the global financial fallout has also contributed to the local scenario of fewer young, healthy people being able to afford traditional medical scheme membership.

“In the past few years, the sustainability of the current model has been challenged, and as a result, various medical schemes have merged and even been liquidated. We need new ways of catering to the growing demand for more affordable options in private health-care cover,” said Makatini.

She said it was unclear what the tax implications of purchasing these more affordable health cover products might be, and whether these funds were set to contribute towards the funding mechanism for NHI.

As it stands this tax season, many South African households receive tax rebates on their medical scheme contributions, which lightens the load on public health services. It has been previously suggested that removing this income tax credit could help fund either LCBOs or the NHI; however, in practical terms, a family of three with a household income of R20 000 per month would see their tax bill soar by about 27%, according to the HFA’s technical advisory committee.

She said that a refreshing of the regulatory framework for health cover would enable the benefits of private health care to reach so many more South Africans.

“This would make enormous, revolutionary strides towards developing a healthier population and reducing the burden of disease so that public facilities could be in a better position to cope with in-hospital care for patients, both now and when NHI is eventually fully implemented,” said Makatini.