Health Squared, the embattled medical scheme that last month sought voluntary liquidation, has been placed under provisional curatorship from 8 September, despite its argument that curatorship was a waste of time and money, and would cost it at least R280 000 a month, funds that could be used for members’ medical treatment.
Judge Allyson Crutchfield made the decision after an application by the Council for Medical Schemes (CMS), reports Business Day.
“The CMS brought the curatorship application to examine the actual financial position of the scheme and oversee the liquidation proces. The court agreed with CMS that a curator is a suitable remedy.”
Health Squared sparked panic among its 23 000 beneficiaries when it announced in mid-August that it was applying for voluntary liquidation after failed attempts to merge with larger and more financially stable schemes.
Its attempt to go into voluntary liquidation via an application to the Gauteng High Court (Johannesburg) was opposed by the CMS, which favoured curatorship. The Nephrology Society wanted the proposed liquidation delayed by two months so that members with life-threatening conditions, such as kidney disease, could be afforded time to find a new medical scheme.
Health Squared has struggled to meet the medical schemes industry’s required 25% solvency ratio. Nevertheless, in the months leading up to its demise the scheme apparently spent millions of rands on non-essential expenditure, Business Times reported last month.
The CMS has faced criticism for failing to act sooner against Health Squared and ignoring recommendations from concerned stakeholders that the scheme be investigated for possible irregularities.
Business Times reported that despite an agreement being signed between the CMS and Health Squared in December 2021, which stipulated that a statutory manager be appointed to oversee the scheme, no further action was taken, which saw its solvency ratio deteriorate to just 2.15% by the beginning of August.
Johannes “Joe” Seoloane, who acted as the curator of the KeyHealth Medical Scheme from September 2020 until the process was lifted in April 2022, has been appointed as provisional curator of Health Squared, said the CMS, giving him a mandate to restore “overall effective governance” while ensuring members and beneficiaries continue to be serviced in the interim.
See more from MedicalBrief archives:
Health Squared gets leave to apply for voluntary liquidation
Health Squared spent millions on non-essentials as membership shrank, court papers show
Health Squared medical aid scheme applies to be wound up