Tuesday, 19 March, 2024
HomeMedico-LegalMed scheme regulator relaxes rules to aid membership retention

Med scheme regulator relaxes rules to aid membership retention

The medical schemes regulator will temporarily relax rules to allow the industry to implement measures aimed at retaining members in the face of COVID-19, which threatens the affordability of cover for employers and consumers alike, says a Business Day report.

The Council for Medical Schemes (CMS) has issued an industry circular saying medical schemes can apply for exemptions to the Medical Schemes Act to launch lifelines such as contribution holidays, or access their medical savings accounts to cover premiums. The R160bn medical scheme market covers about 8.9m members, most of whom are subsidised by their employers. Medical schemes' biggest worry is how to hold on to members as companies and individuals grapple with the economic fallout of the lockdown and the growing threat of retrenchments.

“Almost all schemes have sufficient reserves to deal with even the worst-case scenarios of COVID-19 claims. This is exactly what reserves are for – a rainy day,” said Insight Actuaries & Consultants joint CEO Christoff Raath. “The biggest uncertainty facing medical schemes is the possibility that jobs may be lost, and the number of beneficiaries reduce in an anti-selective fashion,” he said, referring to the fact that young and healthy members would be the first to opt out.

Smaller medical schemes with between 15,000 and 40,000 members were among the most vulnerable, as they typically relied on two or three key employer groups, said 3ONE Consulting Actuaries managing partner Carl Yssel. The CMS has stopped short of granting blanket exemptions to the Act. “Each exemption application will be assessed on its merit with key consideration given to a scheme’s financial ability to absorb such an arrangement,” spokesperson Grace Khoza said. The CMS has also declared COVID-19 a prescribed minimum benefit compelling schemes to fully cover claims for the disease, notes the report.

[link url="https://www.businesslive.co.za/bd/national/health/2020-04-16-medical-schemes-regulator-says-rules-may-be-bent-for-covid-19/"]Full Business Day report[/link]

MedicalBrief — our free weekly e-newsletter

We'd appreciate as much information as possible, however only an email address is required.