Blow for cheaper healthcare in South Africa

A recent court judgment denied the Board of Healthcare Funders’ (BHF) application to allow local medical schemes to offer Low-Cost Benefit Options (LCBOs) in South Africa.

The BHF announced on Wednesday, 2 April, that it is disappointed in this outcome and plans to appeal the North Gauteng High Court’s decision.

“We are currently studying the judgment in detail, in consultation with our legal counsel, but we can announce that we will be appealing the ruling,” it said.

The BHF applied to the court to allow medical schemes to offer LCBOs in South Africa. 

“Our intention in compelling the Council for Medical Schemes to permit medical schemes to offer LCBOs is to enable broader access to affordable private medical coverage for lower-income South Africans,” the board explained.

It said LCBOs, essentially pared-down medical aid packages, represent an immediate, practical and sustainable solution to expand private healthcare access in the country.

The board claimed this could benefit an additional 10 million South Africans who can’t afford full medical scheme coverage but are paying out-of-pocket expenses for private healthcare providers.

The Stats SA 2020 General Household Survey revealed that nearly 30% of uninsured South Africans use private healthcare providers as their first point of care. 

This is in addition to the 16% of the population covered by medical schemes, of which more than two-thirds come from previously disadvantaged groups.  

“This means that nearly half the population relies on private healthcare in some form, but the majority are being forced to pay out of their own pockets for these services,” the BHF said.

“Expanding access to LCBOs would benefit these low-income earners the most and would significantly contribute towards the government’s broader goal of achieving universal health coverage.”

The BHF added that it would also alleviate pressure on South Africa’s overburdened public health system.

“The BHF remains committed to constructive engagement with all stakeholders, including the Council for Medical Schemes and the Department of Health,” it said.

“Collaboration between the private and public sector is the only way to ensure a healthcare system that works for all.”

Draft block exemption

In February 2025, Trade, Industry and Competition Minister Parks Tau published a draft block exemption for tariffs in the healthcare sector for public comments.

This exemption is expected to increase affordability, transparency, and universal access to quality healthcare services in South Africa.

The Competition Commission announced on Wednesday, 19 February, that it has released a draft block exemption for tariffs in the healthcare sector. 

This draft comes after the commission declined individual exemption applications, including from the BHF, as it preferred an industry-wide approach with regulatory oversight.

The draft block exemption aims to regulate how healthcare tariffs are determined, making the process more structured and transparent.

In simple terms, a draft block exemption is a temporary rule that allows businesses in a specific industry to work together in ways that would normally be considered anti-competitive or against the law.

In this case, the healthcare draft block exemption allows hospitals, doctors, and medical aid providers to collectively decide on medical tariffs, billing codes, and quality standards. 

Normally, this kind of coordination would be illegal under competition laws because it could lead to price-fixing. 

However, the government allows it to temporarily reduce healthcare costs and improve transparency. The exemption would last for three years, with a possible extension.

The Competition Commission explained that, currently, tariff negotiations happen bilaterally, which has led to inefficiencies, high cost of healthcare services, pricing differences, and a lack of pricing transparency.

“The draft block exemption is aimed at enabling a structured and streamlined process for tariff determination on an interim basis, effectively creating a multi-stakeholder framework for the determination of healthcare tariffs,” the commission said.

“Establishing an equitable and transparent framework for tariff determination contributes to the long-term goal of reducing costs and promoting universal access to healthcare.”