Experts Beg for Medical Aid Reform

Medical aid reform planned many years ago but never implemented will have to come into operation soon or medical aids will be totally unaffordable.

Speaking at the Africa Health conference in Midrand  on Friday, 30 May 2014, experts called medical aid schemes “a regulatory orphan”.

At the ANC’s infamous Polokwane conference in 2009, the party decided it wanted a mandatory National Health Insurance (NHI) scheme. That put the medical reforms on hold. However.

The NHI has been slow in getting off the ground with just a handful people of benefitting fro NHI in a pilot project.

Why Medical Aid Costs are Out of Control

In the late 1990’s, the government introduced legislation prohibiting medical aids from refusing to accept anyone membership no matter their age or health status. Certain measure were planned to make sure they would remain financially viable but no mechanisms were put in place. This meant medical aids had to charge everyone a lot.

The net result, said Wits Professor Alex van den Heever, was that medical aids were becoming less Medical Aid Reformsustainable and increasingly unaffordable to ordinary South Africans.  Adding to the problem is that health care costs are rising well above the infllation rate each year.

Prof van den Heever said medical aid schemes were meant to provide treatment to sick and vulnerable members of society. That is why they may not refuse anyone members, no matter how ill the applicant is and neither may they charge older members more.

In order to remain financially viable, medical aid schemes rely on more and more young, healthy people joining all the time to subsidise the sick. In 2004 a risk equalisation mechanism was proposed to spread the risk among all the medical aids.

This would have allowed medical schemes with a large number of sick and older members to lessen their risk by sharing the risk with schemes that had many younger people as members.

However, this mechanism was never implemented. Experts are calling for this as one of the reforms needed to rescue the industry.

The Competition Commission is set to begin an enquiry into health care costs in October. The commission will also give its input into possible reforms.