South African medical schemes to fund COVID-19 vaccines for 30% of adults

PUBLISHED: Wed, 06 Jan 2021 17:55:34 GMT

By Alexander Winning

JOHANNESBURG, Jan 6 (Reuters) – Millions of South Africans will have their COVID-19 vaccinations subsidised by medical schemes that pool health insurance premiums through an agreement with the government, a top medical scheme administrator said.

Under the arrangement, medical schemes will pay above cost for doses for their members – roughly 7 million adults over the age of 15 – subsidising procurement for another 7 million adults who are without private medical cover, Ryan Noach, chief executive of the country’s largest medical scheme administrator, Discovery Health, said.

In all, vaccines for around 30% of the country’s adult population would be financed by the agreement.

Africa’s most advanced economy aims to vaccinate a minimum of 67% of its population against the coronavirus to reach herd immunity, Health Minister Zweli Mkhize said on Sunday.

But it is yet to start vaccinating or receive its first doses, and some local health experts and trade unions have publicly criticised the government for moving too slowly with its vaccine strategy.

Noach told Reuters on Wednesday that the cost to medical schemes of buying the vaccines could reach a maximum of 7 billion rand ($464.2 million) but may be much less. That was “completely digestible”, he said, since it represented less than 2% of gross annual premiums.

Many medical schemes ended 2020 with large surpluses because non-coronavirus related healthcare was drastically reduced during the pandemic, he added.

“What’s important is the funding is there, and we’ve got to secure offtake of the vaccines,” Noach said.

South Africa intends to procure its vaccines centrally, and negotiations with vaccine manufacturers are being handled by the government. Local health regulator SAHPRA is yet to approve any vaccines for use but has said it will fast-track applications.

Apart from the agreement with medical schemes, the government plans to source vaccines for 10% of the population via the COVAX Facility, a global vaccine distribution scheme co-led by the World Health Organization. It is talking to large local businesses about contributing funds towards the remaining vaccines it needs to procure.

Noach said the arrangement between medical schemes and the government would not affect profits at Discovery Health, part of Johannesburg-listed financial services group Discovery, because the administrator earns a fixed fee to look after its medical schemes.

It made sense from both humanitarian and economic angles in that it would save lives and cost far less than another national lockdown, he said. ($1 = 15.0788 rand) (Reporting by Alexander Winning Editing by Joe Bavier and Alison Williams)

(c) Copyright Thomson Reuters 2021. Click For Restrictions –

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