“What the attempt here is to try and say what is it that medical schemes can do and what it is that health insurance products can do, [and] the demarcation between these two products. Medical schemes in themselves, in the Medical Schemes Act, there is a very clear and broad definition that defines the business of a medical scheme, and health insurance products could be deemed to be doing the business of a medical scheme,” Butsi Tladi, managing director at Alexander Forbes Health, told CNBC Africa.
“If they are doing that, then there’s an obligation on them to register as medical schemes, but if you’re a medical scheme there are other onerous provisions that a product needs to provide for, and they come at a great cost.”
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National Treasury’s final regulations on the demarcation between health insurance policies and medical aid schemes are expected to be published next month. Wayne Mann, director of group risk at The Unlimited, added that the demarcation is a means of improving operations within the industry.
“What government is primarily concerned about is that [some] health insurance policies are, in fact, undermining medical schemes and the social solidarity principles that underpin them. What they are concerned about is that if they are allowed to continue as is, the commercial viability of medical schemes will be threatened in the long run, which will impact on their members,” Mann explained, adding that the move could however be unconstitutional.
This was due to the fact that Section 27 of South Africa's constitution guarantees the right of every South African to have access to healthcare services, and that the rights enshrined in the bill of rights must be given their widest possible meaning.
This includes the ability of a person to provide at a financial level for their healthcare requirements.
Mann added that if the regulations are implemented, key products such as those offered by The Unlimited, which provides primary healthcare benefits, would no longer be available to the vast majority of South Africans who cannot afford medical scheme contributions.
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“Therefore their only alternative will be to go back into the state healthcare system, which as we all know is severely overburdened,” said Mann.