Medical Aid Schemes Moving in Right Direction?

If you ask most any South African on the street today, they will tell you that medical aid schemes are liars and thieves. They feel that these organizations will stop at nothing to bump up their margins, even denying members vital healthcare services.

The publishing of a draft amendment to regulation 8 of the Medical Schemes Act in the first half of 2015 did little to alter this negative perception. If it goes through, the amendment will limit the financial obligations of medical schemes with respect to paying for PMBs or prescribed minimum benefits.

The law as it stands now requires medical schemes to pay for treatment of any of the 270 conditions and 26 chronic ailments listed under PMBs in full. ‘In full’ meaning that they are expected to cover the cost of diagnosis, treatment and care.

The draft amendments however seek to limit the amount the scheme is liable to pay to a tariff guide made in 2006. Entitled the National Health Reference Price List, these figures were an attempt to bring the limit for PMBs to a level more reflective of market realities. But the figures in this price list are low and, even when adjusted for inflation, barely cover the charges levied by specialist doctors and other healthcare providers.

Medical Schemes and PMBsClearly a situation is being created that favours the medical schemes over their customers; the people who put them in business to begin with. While they enjoy a reprieve from the claims they have to pay out, folks already paying through the nose for monthly premiums have to again dig deep to cater for the difference between medical scheme rates and the actual cost of treatment.

Previously the wording of the act implied that medical schemes only needed to pay for PMBs in full if the patient was being treated at a public hospital. This led to a mass migration of patients from private healthcare facilities and naturally the state institutions were soon overwhelmed. This kicked off a three-way tug of war between medical schemes, their customers and the Council of Medical Schemes.

Following prolonged discussions and a court case, it was agreed that the same PMBs standards for state hospitals be applied to private healthcare providers. But while public hospitals rejoiced at the reprieve and medical scheme members revelled in increased accessibility of healthcare, the medical schemes were groaning. It was they who would have to cater for the higher cost of treatment charged by private providers.

Their complaints were more than justified. Some of them even spotted a tendency for providers to inflate their charges for PMB conditions knowing that the medical scheme would be required by law to foot the bill. But this had a snowball effect on the medical scheme subscribers as the schemes converted the higher costs into higher premiums for them. This in turn led to an exodus of South Africans from medical schemes to hospital plans.

Though the intention of the government to create a win-win for all is clear, the Medical Schemes Act will need to be panel-beaten a little further to create such a scenario. It is clear that the Department of Health needs to consult widely before coming up with amendments to the scheme.