Medical aid consumers are facing premium increases of 10% or more in 2017, as well as the risk at the other end of the equation that patient protection and benefits may be eroded.
The Council for Medical Schemes announced last week that it is reviewing the Prescribed Minimum Benefits (PMBs) – the basic package of care consumers get when joining a medical aid. These benefits have to be covered no matter their cost, according to the council’s law. But most medical aids have said it is the law that pushes up premiums.
The Hospital Association of South Africa, in its response, said while it welcomed the review, “we caution that the review should seek wherever possible to not unduly reduce patient protections and benefits
The Times writes that the benefits mean that medical aids have to cover 26 chronic conditions and 270 diseases, ensuring consumers have a basic level of care in exchange for a premium. But many schemes have provided evidence to the Competition Commission’s independent inquiry into health costs, showing the benefits are increasing costs and repelling new members. Marine Erasmus, a health economist at Econex, said: “The Prescribed Minimum Benefits are accepted by the industry to be driving up costs.”
According to the report, the council said its review needed to ensure that the basic benefits were “financially sustainable” and “viable”.
It costs about R600 for a medical aid member to pay for these benefits, meaning all medical aids have to cost more than this. Older people who use these benefits cost medical aids more than R1,000 per member in a month, according to the council’s latest yearly report. “If there is a proper review, it could work towards decreasing prices,” said Erasmus.
The report says the review will also look at what diseases are covered as a basic package of care and if some needed to be removed or added. This means the review could also be bad news for consumers as it could remove certain benefits.
Medical lawyer Neil Kirby said if the focus of the review is on primary or preventative care, as the council’s review document suggests, it could result in fewer benefits for consumers. Healthman consultant Johann Serfontein said: “The council’s motivation for the Prescribed Minimum Benefits review doesn’t make sense.
“They want to align medical aid benefits to the National Health Insurance which is being implemented in 10 years’ time, where medical schemes will only provide supplementary cover.”
Discovery Health CEO Jonathan Broomberg is quoted in the report as saying: “The process outlined by the council for medical schemes appears to be carefully designed and rigorous and Discovery Health looks forward to working closely with the council to support this review.”
The Hospital Association of South Africa, in its response, said while it welcomed the review, “we caution that the review should seek wherever possible to not unduly reduce patient protections and benefits. In addition, we urge the Council to embark on a more comprehensive review of medical scheme legislation with the aim of reducing the cost of medical scheme membership and enhancing its sustainability.
“We agree that PMB’s have contributed to the increased cost of medical scheme contributions. This has been exacerbated by anti-selection and the absence of a risk adjustment mechanism in the medical scheme environment.
“We also acknowledge that there are uncertainties and confusion among consumers with respect to PMB’s. Nevertheless, PMB’s are an important insurance mechanism for protecting medical scheme members against catastrophic healthcare expenses. PMB’s should thus be retained as far as possible and supplemented with essential primary care benefits.
“Even as the PMBs are reviewed, we would urge the Council to re-consider other regulatory initiatives that have been raised by many experts and could similarly reduce the costs of medical scheme cover. These include a review of the medical scheme regulatory reserve requirement; the implementation of a risk equalisation fund; the implementation of a low-cost benefit option; and the requirement for compulsory medical scheme membership among employed persons. Taken together, these reforms could provide significant relief for consumers and medical schemes.”Full report in The Times