A recent change to the law governing medical insurance recently came into effect, with the result that many policy holders were stripped of their healthcare products.
Members of medical schemes were unaffected, but poorer South Africans who were able to afford health insurance that covered their basic needs are now left unable to pay the higher cost of joining a medical scheme. These primary healthcare insurance policies provided a range of benefits that included doctor’s visits, acute and chronic medication, emergency medical care, dentistry, and optometry. Less comprehensive than medical schemes, these policies were more affordable, especially when insurance companies granted bulk discounts for large groups.
It is arguably the case that the new law infringes the right to property. Our Constitution draws a distinction between deprivation and expropriation of property rights. Expropriation occurs when the state dramatically interferes with an owner’s property rights. The state may only expropriate property for a public purpose or in the public interest. It is also required to pay the owner compensation that is fair and equitable. For example, if private land stands in the way of building a new road, the state may expropriate this property if it compensates the owner. In essence, expropriation is a form of deprivation of property accompanied by compensation.
In the Constitutional Court case of Agri SA, Chief Justice Mogoeng held that “[t]here can be no expropriation in circumstances where deprivation does not result in property being acquired by the state”. However, he added that “[a] one size fits all determination of what acquisition entails is not only elusive but also inappropriate particularly when an alleged expropriation of incorporeal rights, like mineral rights, is considered” and that a “case by case determination” is “the more appropriate way of dealing with these matters”.
It is an open question whether the healthcare regulations amount to deprivation or expropriation of property. The state will be removing the public’s right to hold health insurance policies, but it will not be acquiring those policies for itself. In either instance, the Constitution demands that an interference with property rights is only allowed through a law of general application.
For a law to have general application it must be easily understandable and publicly available. This ensures that citizens can comply with the law. Furthermore, everyone must be treated equally before the law. This means that a law is not of general application if certain classes of citizens are singled out for special or detrimental treatment.
King Henry VIII was infamous for using bills of attainder to punish his enemies and seize their property. These pieces of legislation purported to be genuine laws on the basis that they were produced by lawmakers in parliament. However, they were not laws of general application because of their focus on individuals or narrow classes of people.
The new health care regulations have been in the public domain for several years and their impact is easy to understand, but there is a legitimate concern that they do not provide for equal treatment before the law. The regulations arbitrarily discriminate between people who are members of medical schemes and those who own health insurance policies. The first class of people will be allowed to keep their coverage, while the latter group will not.
The regulations have a disproportionate effect on poorer South Africans who were able to afford primary health cover. Many who have had their policies confiscated, will have to resort to public health care, which will add further strain to an already over-stretched system.
The Minister of Health may find himself the subject of a lawsuit in the Constitutional Court. Those who were forced by the law to forego their health insurance may band together in a class action suit to challenge it for violating their property rights. A successful challenge could set the law aside, or lead to a finding that the law constitutes expropriation of property. If a court concluded that there was expropriation, this would trigger on obligation on the state to pay compensation to all the people that lost their health insurance when the law took effect. This would rectify the wrong suffered by the litigants, but it would siphon valuable resources from an already shrinking budget. To avoid having egg on its face, the Department of Health should reconsider its stance on health insurance.
Mark Oppenheimer is a practicing advocate and member of the Johannesburg Bar