The Board of Healthcare Funders (BHF) has launched a legal attack on the medical scheme industry regulator over its tardiness in implementing cheap, pared-down benefit packages aimed at low-income workers, saying it is being “driven by political motives rather than fulfilling its statutory obligation to protect members’ interests”.
In papers filed in the Gauteng High Court (Pretoria), the BHF says the Council for Medical Schemes (CMS) is preventing millions of people from accessing affordable cover, reports BusinessLIVE.
More than seven years after it began developing a legal framework enabling medical schemes to offer low-cost benefit options (LCBOs) exempted from providing the full, costly suite of benefits stipulated by the Medical Schemes Act, the CMS is still considering how to do it.
Aimed at low-income earners, the schemes offer cheap membership fees of only a couple of hundred rands a month. Typically, no private hospitalisation cover is provided – only primary healthcare. Prescribed minimum benefits – like cancer care and some chronic medications – are also not covered, reports News24.
The initial plan was to eradicate LCBO by the end of March 2021. But the industry pushed back, forcing the CMS to extend the shelf life of these products up to 31 March 2024.
And while it won’t consider applications from medical schemes seeking an exemption to the Act to offer LCBO products, it has allowed a closed group of health insurers to continue selling primary healthcare cover products that effectively do the same thing, pending finalisation of the regulatory framework.
“The inference is the reason LCBOs have not been developed and implemented is either because of a lack of political will or another political agenda… It does not suit the (Health Department), tasked with implementing NHI (National Health Insurance), to have increased membership of medical schemes or for the private sector to deliver a viable low-cost product at the same time as it tries to sell NHI,” said BHF head of research Charlton Murove in his founding affidavit.
In a separate affidavit, Insight Actuaries & Consultants joint-CEO Christoff Raath said the most plausible explanation was that the CMS was intentionally delaying the LCBO to facilitate the implementation of NHI.
“The delays first started … two months before the release of the NHI white paper in late 2015. The LCBO framework was approved by the CMS in September 2015, but then suddenly withdrawn in October 2015. It is widely believed this was done on the instruction of the national Department of Health,” he said.
The LCBO process was re-established in 2020, but got nowhere, and there was no sign of the process reaching a meaningful conclusion, he said.
No plausible explanation had been offered by the CMS for the delays in devising an LCBO framework, which denied 10m people access to affordable medical cover, Raath said.
The BHF named the CMS, its registrar and the Health Minister as respondents. It has asked the court to declare the respondents’ failure to develop and implement an LCBO framework to be irrational, unreasonable and unlawful in terms of section 6 of the Promotion of Administrative Justice Act (PAJA) and in terms of section 1.c. of the Constitution. The Constitution says administrative action must be lawful, reasonable and procedurally fair, and these requirements are set out in detail in section 6 of the PAJA.
The BHF has asked the court to review and set aside the CMS’ latest extension to the exemption to the act granted to health insurers; its moratorium on medical schemes offering LCBOs; and its refusal to consider exemption applications from schemes wishing to do so, pending the finalisation of the LCBO framework.
However, it has asked the court to suspend this decision for 12 months to give the CMS time to devise and implement LCBOs and, in the interim, to either grant medical schemes a general exemption to the Act, so they can launch LCBO products, or consider their LCBO applications on a case-by-case basis.
CMS legal adviser John Letsaolo said the regulator had not been notified of the matter and had yet to obtain BHF's court papers. It had therefore not determined its course of action.
News24 article– Medical schemes take regulator to court over cheap options (Open access)
See more from MedicalBrief archives:
Political meddling at heart of CMS low-cost medical aid delays
CMS anger over claim it’s depriving South Africans of basic private healthcare
BHF’s ‘great concern’ over CMS circular on medical aid member support and exemption guidelines