Issue No. 48
Medical Schemes Bill
4 November 1998
The Medical Schemes Bill will have a significant impact on the country’s health care industry. Many South Africans never had access to medical schemes because of the discriminatory policies and practices of the industry. The most obvious victims of the industry were the sick and elderly, the unemployed and poor. The ANC Minister of Health received wide spread acknowledgement for her commitment to provide unlimited access to medical schemes to all South Africans. The Bill cancels all previous legislation and is guided by the Government’s commitment to widening access to health care.
The Present System is Unfair
Because the current system discriminates against the sick and elderly there is a need to:
- expand access to medical schemes by enforcing a system of community rating and non-exclusion. Now no medical scheme can exclude people on the basis of their age or sex
- provide for necessary benefits to ensure access to private health care and costs are not shifted to public hospitals
- protect against applications to medical schemes only when applicants are sick or old
Creating a Fair and Just System
The main intention of the Bill is to create a just and fair health system. It does this by:
- prohibiting the exclusion of applicants from medical schemes on the basis of race, age, sex, or state of health – this is called community rating as opposed to biassed risk rating
- allowing everyone into an open medical scheme, provided they are able to pay the average contribution
- reducing the bias by medical schemes to dump some of their high-cost patients who can no longer gain access to private health care, forcing the state to carry the burden
- requiring medical schemes to provide their members with a core set of benefits, and to ensure full cover for benefits provided to members at public hospital level
- ensuring that members are protected with necessary and cost-effective health care services
Improving on the Management of Medical Schemes
The Bill introduces a number of ways to improve the governance of schemes and to ensure that members and consumers are adequately protected.
A Council for Medical Schemes is established by the Bill to:
- protect the interest of members at all times
- control and coordinate the functioning of medical schemes in line with the national health policy
- recommend guidelines for the assessment of quality of services provided by medical schemes
- investigate complaints and settle disputes
- collect and distribute information about private health care, and
- advise the Minister on any matter concerning medical schemes
The Bill sets minimum standards for corporate governance and the monitoring of the industry by the Council. Ordinary members of medical schemes will now have the assurance that their money is being properly invested and managed.
The Minister will appoint a Registrar of Medical Schemes who will:
- enforce the new approval system for medical schemes
- impose more severe pre-qualification measures for registration of medical schemes
Consequences of the Bill
The Bill will:
- Allow many people who are currently denied cover to gain access to cover
- Ensure that medical schemes now compete by reducing medical costs, not by excluding some applicants
- Enforce effective protection against anti-selections
- Minimise the chances of bankruptcy among medical schemes by intruding a set of rules to improve the financial credibility and solvency of funds
- Ensure greater protection for the individual
- Ensure that the young and healthy will subsidise the old and sick, because all members will pay the same premium, after adjustment for income and family size
This means all medical schemes will have community rated contributions. There will also be open enrollment so medical schemes will take full responsibility of keeping their members in the health care system.
A minimum benefits package must be provided by medical schemes. People can buy larger benefits packages when they can afford to, but the minimum benefit package must be provided for by all medical schemes.
The Medical Schemes Bill makes provision for people to continue their membership to schemes after retirement age.
The Bill will begin to reconcile the public and private sectors and encourage them to act more harmoniously. It will begin to address some of the disparities that exist in the South African health care system.
Opposition to the Medical Schemes Bill
Those parties and organisations, which date back to the Apartheid era, that oppose this Bill, are not serious about the plight of poor people who have previously been treated as second class citizens poor people who were deliberately turned away from entering medical schemes, who now have a chance to belong to any open medical scheme.
Their opposition is no more than an attempt by people with vested interests to stop the process of fundamental transformation of the health sector.
The ANC Government is very clear that it will not turn away from transformation. It believes that health care is not a privilege, but a fundamental right. And it is committed to provide affordable, accessible and quality health care to all South Africans.
This Bill is another step to re-build the South African nation, establish a culture of respect for fundamental basic rights and transform all sectors of our society. It is proof once again that step by step the ANC is making South Africa a better place for all its citizens.