Health department expects to be sued over proposed NHI changes

Health Minister Aaron Motsoaledi is preparing to be taken to court as he continues to propose changes in the healthcare system that could cost medical aid schemes millions.

Motsoaledi introduced the draft Medical Schemes Amendment Bill and National Health Insurance (NHI) Bill in Pretoria this week. The new legislation proposes significant changes to the way healthcare is funded and managed, including abolishing co-payments, prescribed minimum benefits and waiting periods for medical aid cover.

Medical aid schemes currently hold about R 60-billion in reserve — an amount almost 10% higher than what is statutorily required, said Motsoaledi speaking at a Pretoria press conference.

“These huge reserves were accumulated partly through high premiums but also by introducing the co-payments such that medical schemes avoid having to pay or even dip into the reserves if the situation demands,” he argued.

He says he is already expecting litigation against the department for some of the proposed Act amendments.

“I can’t mention who are the parties I am expecting litigation from, but I can assure I know who they are. I even know which legal firm is preparing to do something like that — but I won’t disclose that,” he told Bhekisisa.

The new draft legislation also proposes that schemes settle every cent charged to a patient. The Council for Medical Schemes (CMS) will also be lowering the percentage of funds schemes must keep in reserves to lower than the threshold of 25%.

“There are people who will scream that this amendment is outrageous and calculated to destroy medical schemes and leave beneficiaries with nothing.”

“I wish to assure you that this was well thought of. The load of complaints received from the public by us … as well as by the medical schemes’ regulator justifies this amendment,” Motsoaledi explained.

Privately-insured South Africans spent almost R30-billion in out-of-pocket payments in 2016, according to the latest CMS report. The regulatory body notes this figure only represents what people claimed back from their medical aids. About half of this expenditure went to paying for medicine and specialists.

WATCH: Motsoaledi says medical aid beneficiaries are spending too much from their own pocket

Also gone will be Prescribed Minimum Benefits, a set of conditions that medical schemes are legally required to cover. In their stead, the new Acts introduce what more “comprehensive benefits” that extend mandatory cover to more everyday needs such as contraception, vaccinations and health screening. Healthcare funders will also no longer be able to impose waiting periods for new members.

South Africans pay about R2.2-billion to the country’s 8500 medical aid brokers if 2017 figures presented by Motsoaledi this week are any indication. With a newly introduced ban on the profession via the Acts, this money can now be used to purchase actual health services, he said.

“We want this money to be made available to pay for direct health expenses of members rather than serving brokers who are not needed in the healthcare system.”

The draft legislation also moots nixing hospital cash plans. Offered by companies such as Standard Bank, Old Mutual and Clientele Life for as little as R99 a month, this kind of cover can provide patients with R5 000 a day should they be hospitalised. But the bonus for these patients’ pockets has sometimes come at the expense of defrauding medical aids as funders foot the bill for their hospital stay.

A three-hospital survey by Discovery Health found that hospital admission rates among members with hospital cash plans were as much as 5.5 % higher than members without such insurance. Hospital stays among these members were also up to 60% longer, according to figures presented at a 2014 Discovery Health summit.

The Medical Schemes Act is only one of 12 pieces of legislation that need to be amended to allow the NHI to come fully into effect by 2026. Motsoaledi said changes to the National Health Act and the Mental Health Act had been prioritised in light of recent provincial crises including the collapse of oncology services in KwaZulu-Natal and the Life Esidimeni tragedy.

Proposed changes and decreasing medical aid tax benefits that started this year could free up at least R40-billion in new money for the NHI. More details on how South Africa will fund its move to universal healthcare are scant without draft legislation that will outline how the NHI Fund will work. The fund will become the single largest purchaser of health services from both public and private providers in the country under the NHI.

WATCH: Motsoaledi says litigation is eminent

Key to this will be lowering the cost of private healthcare. Motsoaledi’s announcement comes just a week before the Competition Commission is expected to realise the results of a four-year investigation into private healthcare pricing. Activists are hoping that the commission’s work will finally reveal what drives what they say are high prices in the sector.

Motsoaledi has alleged that “vested interest groups” have tried to stifle the release of the commission’s findings.

“[They] are trying to block the release of the findings to the extent that they might even interdict it. I can only assume that they do not want the public to know the truth.”

These are unprecedented times, and the role of media to tell and record the story of South Africa as it develops is more important than ever. But it comes at a cost. Advertisers are cancelling campaigns, and our live events have come to an abrupt halt. Our income has been slashed.

The Mail & Guardian is a proud news publisher with roots stretching back 35 years. We’ve survived thanks to the support of our readers, we will need you to help us get through this.

To help us ensure another 35 future years of fiercely independent journalism, please subscribe.

Laura Lopez Gonzalez
Laura Lopez Gonzalez
@Bhekisisa_MG deputy editor. Science lover & lurker.
Bhekisisa team
Bhekisisa Team
Health features and news from across Africa by Bhekisisa, the Mail & Guardian's health journalism centre.

Zuma turns on judiciary as trial nears

Former president says pre-trial correspondence is part of another plot

High court declares Dudu Myeni delinquent

Disgraced former SAA chairperson Dudu Myeni has been declared a delinquent director by the...

SANDF inquiry clears soldiers of the death of Collins Khosa

The board of inquiry also found that it was Khosa and his brother-in-law Thabiso Muvhango who caused the altercation with the defence force members

Lockdown relief scheme payouts to employees tops R14-billion

Now employers and employees can apply to the Unemployment Insurance Fund for relief scheme payments

Press Releases

Obituary: Mohammed Tikly

His legacy will live on in the vision he shared for a brighter more socially just future, in which racism and discrimination are things of the past

Openview, now powered by two million homes

The future of free-to-air satellite TV is celebrating having two million viewers by giving away two homes worth R2-million

Road to recovery for the tourism sector: The South African perspective

The best-case scenario is that South Africa's tourism sector’s recovery will only begin in earnest towards the end of this year

What Africa can learn from Cuba in combating the Covid-19 pandemic

Africa should abandon the neoliberal path to be able to deal with Covid-19 and other health system challenges likely to emerge in future

Coexisting with Covid-19: Saving lives and the economy in India

A staggered exit from the lockdown accompanied by stepped-up testing to cover every district is necessary for India right now

Covid-19: Eased lockdown and rule of law Webinar

If you are arrested and fined in lockdown, you do get a criminal record if you pay the admission of guilt fine

Covid-19 and Frontline Workers

Who is caring for the healthcare workers? 'Working together is how we are going to get through this. It’s not just a marathon, it’s a relay'.

PPS webinar Part 2: Small business, big risk

The risks that businesses face and how they can be dealt with are something all business owners should be well acquainted with

The best local and international journalism

handpicked and in your inbox every weekday