The festive season, for the private medical schemes and health insurance markets started with the dropping of a bombshell. In Circular 80 of 2019, the Registrar and Chief Executive of the Council for Medical Schemes (CMS), Dr Sipho Kabane, announced that, "no Low-Cost Benefit Options (LCBO) will be allowed for low income market segments going forward. Furthermore, no products based on the Demarcation Exemption Framework and/or the MS [Medical Schemes] Act will be allowed beyond 2021".
Jasson Urbach, Free Market Foundation (FMF) Director, states: "Banning health insurance options and scrapping the move to introduce affordable medical scheme cover demonstrates a flagrant disregard for individuals' rights to enter into voluntary private contracts to protect themselves from unforeseen out-of-pocket payments when catastrophe strikes".
Hundreds of thousands of people will be stripped of their cover. The entirely predictable consequence is an increased burden on an already over-stretched public healthcare sector, precisely at a time when the country is in fiscal crisis. Poor and middle-income South Africans cannot afford this form of social engineering and will be denied their constitutional rights of freedom of association, access to quality healthcare, and protection of their private property.
Michael Settas, a member of the FMF’s Health Policy Unit, says, "It is difficult to understand what the motive behind this move is, given that the CMS and the private sector have been working together to develop the LCBO for the past 5 years. Industry leaders are also none the wiser since absolutely no stakeholder engagement preceded this shock move".
Circular 80 targets some of the most vulnerable members of society who, for a brief time, have had an opportunity to better their lives with access to affordable, quality private healthcare. The decision to do away with LCBOs and health insurance products, without saying what will replace them and how much it will cost, is without doubt a violation of the constitutional rights of the affected citizens.
To increase access to quality healthcare for all South Africans, government must allow those who can afford to pay for their own health insurance to do so. To achieve the objective of Universal Health Coverage (UHC), government must remove the regulatory barriers that artificially raise the price of private medical scheme cover and effectively prevent citizens from entering into voluntary private contracts. The government must not deny people their constitutional right to take care of their own healthcare needs and desires.
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