Cheaper medical aid for 10 million South Africans over a decade late

The Board of Healthcare Funders (BHF) has criticised the government’s inaction on implementing policies that would enable medical schemes to offer more affordable healthcare to around 10 million South Africans.

The BHF explained that, despite these options being available and resolutions having passed, nothing has happened in the decade since to make these plans a reality.

If these plans are implemented, the BHF estimates that they could enable an additional 10 million South Africans to afford private healthcare cover.

In a press statement released on Tuesday, 10 February, the BHF urged President Cyril Ramaphosa to address these reforms in his upcoming State of the Nation Address on 12 February.

“There are viable solutions that government could implement now to ease affordability pressures, especially while the National Health Insurance (NHI) Act remains subject to ongoing legal challenges and is still years away from full implementation,” the BHF said.

The organisation pointed to two interventions that the government could implement through regulatory action that would essentially reduce healthcare costs overnight.

The first would allow medical schemes to offer Low-Cost Benefit Options (LCBOs), while the second would enable them to negotiate healthcare tariffs collectively with willing providers.

The BHF estimated that these LCBOs, which are essentially pared-down primary care packages, could enable an additional 10 million South Africans to afford private healthcare cover.  

“Some of these members would also benefit from medical tax credits currently available to scheme beneficiaries – significantly reducing their costs to access healthcare,” it said.

The BHF pointed out that the Council for Medical Scheme (CMS) passed a resolution to adopt a framework for LCBOs as far back as August 2015. However, “no action has been taken since”. 

“As a result, millions of low-income earners are forced to pay out of pocket for private care they could otherwise access through schemes,” the organisation said.

“The NHI will take years to implement, but LCBOs could be made available almost immediately,” said BHF managing director Dr Katlego Mothudi. 

“With the decisive leadership from the regulator, we could rapidly expand access to affordable healthcare for millions of South Africans who currently fall through the cracks. We urge the President to act.”

Collective negotiation

The second intervention the BHF outlined was allowing medical schemes to negotiate tariffs collectively.

This approach was recommended in the Competition Commission’s 2019 Health Market Inquiry (HMI) Report.

According to the NHF, this would help stabilise healthcare costs, improve price transparency, and protect consumers from unaffordable increases. 

“It would also benefit millions of civil servants, whose medical scheme contributions are subjected to above-inflation increases annually,” it said.

“Yet despite a Covid-era exemption framework, government has failed to establish a tariff negotiation forum as recommended by the HMI Report,” the BHF said. 

In 2021, the BHF applied to the Competition Commission for a Competition Act exemption, which would allow it to negotiate with private providers on behalf of its members and publish agreed tariffs.

However, this application was rejected, and the BHF has appealed to the Appeals Tribunal.

“It has been over a year since government invited public comment on draft block exemption regulations, but there has been no movement”, said Mothudi. 

“Yet,  schemes and their members are left in limbo, even though we have the tools to improve affordability.” 

“A clear, time-bound exemption process would signal government’s seriousness about reforming the system in ways that benefit hard-working citizens.”

The BHF emphasised that these two reforms would not require dismantling existing systems or delaying progress towards Universal Health Coverage (UHC).

“On the contrary, they would strengthen the sector and provide a more sustainable bridge to UHC,” it said.

“The BHF supports the goal of UHC, but it will only be realised through public-private collaboration and practical reforms that work for South Africans today,” Mothudi said.