Insurer's attack medical regulator's 'brutal violation of constitutional rights'

Organisation: Position: Deadline Date: Location:

The out-of-the blue decision to end private-sector primary healthcare cover in March 2021 was “a brutal violation” of constitutional rights and, should medical insurers attempts to engage with the Council for Medical Schemes (CMS) be ignored, legal challenges are likely to follow, writes MedicalBrief.

The “shambolic” CMS move is “a continuation of the slow and steady poisoning of the private healthcare sector … and the governments dogged determination to dismantle [it] in preparation for its flawed and ideological desire to introduce its centrally controlled and administered National Health Insurance (NHI) scheme, says the Free Market Foundation. It is “ without doubt, a violation of Section 27 of the Bill of Rights”.

Business Day reports that the CMS decision, made late last year and affecting half a million people, comes at a time when there are few viable alternatives in place as National Health Insurance is still many years away from offering primary healthcare cover, and medical schemes remain unaffordable and obliged to offer expensive hospital cover. At the same time, the CMS announced it will not grant insurers any more exemptions from the Medical Schemes Act.

Business Day reports that insurers were caught unawares and accuse the council of failing to consult them on its decision to scrap these policies and would possibly challenge the decision legally. Dr Ryan Noach, CEO of Discovery Health, says that, together with relevant industry bodies, it will urgently engage with the CMS, the Health Department and the National Treasury. Vernon Chorn, CEO of Unity Health, says it has taken legal opinion and has reached out to the CMS. It is considering an appeal against the registrar’s decision, which he says fails to appreciate the savings insurers create for consumers. Richard Blackman, CEO of Day1 Health, says closing primary healthcare products in the absence of a viable alternative will be "a brutal violation" of the constitutional right to access healthcare services.

Defending its decision to close the primary healthcare plans, the council is quoted in the Business Day report as saying its research shows that most insurers only pay out between 35% and 60% of premiums as healthcare benefits, unlike most medical schemes which pay out more than 90% of contributions as claims. Most of the insurers are spending close to half of premiums on non-healthcare related expenses such as administration and broker commission, while most medical schemes spend closer to 8.4%, the council found. But Chorn says the council’s report on insurance products is biased and fails to recognise that primary healthcare products are more expensive to administer than similar-sized hospital plans as there are 10 to 30 times as many claims for day-to-day expenses.

In an editorial over the festive season, Business Day described the “stunning” CMS decision as a “cavalier move” by an entity that appeared to have gone “rogue”. CMS registrar Sipho Kabane’s reasons behind the move were “muddled to say the least”

“The news that all but three of the CMS’s 11 senior managers will be out the door by April only adds to the sense of unease that has permeated the industry… There has long been talk that government players will do nothing to support the private health-care industry and the patients who use it, because a troubled sector makes the case for NHI stronger. Kabane is only adding fuel to that fire. He purports to be acting to protect consumers, but his latest moves will only hurt them.”

Full Business Day report

Full Business Day editorial

Receive Medical Brief's free weekly e-newsletter

Related Posts

Thank you for subscribing to MedicalBrief

MedicalBrief is Africa’s premier medical news and research weekly newsletter. MedicalBrief is published every Thursday and delivered free of charge by email to over 33 000 health professionals.

Please consider completing the form below. The information you supply is optional and will only be used to compile a demographic profile of our subscribers. Your personal details will never be shared with a third party.

Thank you for taking the time to complete the form.