The views expressed in this article are not necessarily those of the FIA. The article below was supplied by 2018 FIA partner, Lombard Partnerships.
President Cyril Ramaphosa has recently discussed what we are all thinking: SA’s healthcare system is in crisis. Addressing union members in June, Ramaphosa is quoted as saying: “Right now our hospitals are burdened and our healthcare is in crisis, and we believe the only way to correct this is to pool all resources and everyone makes a contribution.”
There seems to be an endless flow of bad news surrounding public healthcare across the nation. Recent wildcat strikes by healthcare workers at Charlotte Maxeke Academic hospital left a trail of destruction. Klerksdorp’s Tshepong Hospital saw patients being intimidated by violent protesting workers. Kwa-Zulu Natal suffers from a dire lack of oncologists and equipment – leaving cancer patients on heartbreakinglong waiting lists.
And of course, we cannot forget the deaths of 144 psychiatric patients when they were transferred from Life Esidemini to 27 NGOs.
To resuscitate our healthcare system, Government is proposing the concept of universal healthcare, where over R250 billion per annum is to be made available – via various funding mechanisms – to provide quality healthcare services to all citizens. It hopes to implement the new system by 2026.
Universal healthcare gained momentum earlier this month, with Cabinet approving the National Health Insurance (NHI) Bill – which helps to pave the way for universal healthcare.
Demarcation
But the new legislation will also change the way that Medical Aids and others in the medical insurance industry provide services. While details are still forming and emerging, Health Minister Aaron Motsoaledi has indicated the plans include the abolition of Medical Scheme co-payments and the monthly broker fees, as well as the removal of waiting periods and late joining penalties.
The outcome of these bills, as well as the thorough review of the prescribed minimum benefits (those medical services that Medical Schemes are forced to cover), may entirely reshape the medical industry.
Already, the sector has seen positive reform in recent times, with the new ‘demarcation’ regulations clarifying the role of Medical Aids versus other Medical Insurance products (including the likes of Gap Cover, Dread Disease Cover, Hospital Cash Plans, Medical Travel Insurance and Primary Healthcare insurance).
When it comes to Gap Cover providers, demarcation includes these key provisions:
- Gap Cover providers must follow the same underwriting requirements as Medical Schemes – including open, non-discriminatory enrolment and waiting periods for specified pre-existing conditions.
- Gap Cover benefit limitations are capped at R150 000 per annum, per person.
- Greater transparency governing the relationships between client, broker and insurer of Gap Cover (with a fixed, sliding scale, commission rate of between 5% and 20%).
- No discrimination based on one’s state of health (pricing can be age-related, but that pricing must then be applied to all new clients in that age range).
Personal finances under pressure
Demarcation has helped to better protect and educate customers that weren’t always aware of the benefits offered by the various health insurance offerings, as opposed to traditional Medical Aid schemes.
At times, consumers would be confused between a medical aid and insurance offerings. But now, the arrangement is much clearer, and customers can more easily see the role of a Medical Aid and the benefit of combining it with the appropriate supplementary Gap Cover.
While the universal healthcare plans may further alter the way that Medical Aids and Gap Cover providers operate, most experts believe that private healthcare services and insurance will certainly continue in some shape or form.
In fact, considering the fact that taxpayers will ultimately have to fund any new universal healthcare fund, we can expect a further crunch on our personal finances. This leaves most of us in no position to afford massive out-of-pocket private medical expenses, further underscoring the importance of Gap Cover to insulate us against medical expense shortfalls.
Many of those accustomed to the quality of private healthcare will be sceptical of public healthcare services, even if they’re improved and expanded under the new vision for universal healthcare. For brokers, it will be about selecting Medical Aid and Gap Cover combinations that suit the needs of every individual customer, while ensuring maximum value from their monthly premiums and contributions.
