Why the NHI announcements will not affect your pocket yet.
The massive media coverage around the recent announcements by Health Minister Aaron Motsoaledi has everyone in a bit of a tailspin.
People without access to decent medical cover believe that soon, improved and free healthcare will be available to all, while members of medical schemes are worried about the cost implications of this, both in terms of increased taxation as well as a possible deterioration of their medical scheme benefits.
It is worth taking a step back and understanding what has actually happened. So far, two Bills have been issued: one relating to the structuring of National Health Insurance (NHI) and the other issuing amendments to the Medical Schemes Act of 1998.
Bills are not Acts, which means they are not yet law. History shows us that very seldom ‒ if ever ‒ is a Bill is in its original form. Given the huge ramifications of these Bills, we can be assured that there will be many submissions, hearings and debates.
Michelle David, regulatory lawyer at Norton Rose Fulbright says that a contentious Bill can take a protracted time to become law, and in this case, given the many stakeholders, it could take a while.
“It is unlikely that these Bills will not be challenged. NHI will be the largest procurer of healthcare in the industry and will set tariffs. This has implications for both healthcare providers and medical schemes which will all be part of the submissions and discussion. This will go the long road,” says David who adds that the NHI Bill will be scruitinised by parliament, given that at this stage it is far from clear how the NHI is to be funded.
David also points out that the committees that have been envisaged to determine the level of care under the NHI, both in the public sector and through medical schemes, would only be able to form once the various Acts have been passed, providing them with a term of reference.
Given the level of complexity, changes to medical schemes and funding constraints, the enactment of the NHI Bill is likely to be many years away and will be hotly debated. The timing of the announcement seems more in line with elections next year than any actionable points.
Will the NHI affect your medical scheme cover?
What we can say with certainty is that these Bills will have no impact on next year’s medical scheme options as changes will only take place once the amendments to the Medical Schemes Act are passed, which is likely to take several years and is unlikely to appear in its current form.
Jonathan Broomberg, CEO of Discovery Health, says that it is clear that individuals will retain the right to be covered by a Medical Scheme or to opt for public healthcare through the NHI, or some combination of these.
The proposals are fairly complex and appear to provide for interpretation. Overall medical scheme experts appear largely confused by the Amendments, especially considering that the press release issued by the Minister was at odds with what was actually contained in the Bill.
A case in point is the announcement by the Minister that brokers will be removed, yet the Bill makes no mention of this other than that the level of remuneration can be set by the Council for Medical Schemes and that there needs to be transparency for members of broker fees charged.
The talk about removing co-payments has also been confusing. Firstly, this relates to prescribed minimum benefits (PMBs) and not necessarily elective procedures such as a hip replacement. PMBs are a set of defined benefits to ensure that all medical scheme members have access to certain minimum health services, regardless of the benefit option they have selected. This includes emergency care as well as cover for chronic conditions and includes around 270 medical conditions. Currently in some cases a member may incur a co-payment for a PMB if the member opts for medication outside of the formulary list or uses the services of medical providers not contracted to the scheme.
What the Bill seeks to do is to remove the existing list of PMBs and replace it with a new Comprehensive Service Benefits package which is likely to focus on primary healthcare and preventative healthcare.
Under the proposals, these services will now be determined by a committee which will have to consider affordability in terms of what ‘package’ the NHI will provide. Given funding constraints, this would most likely see a reduction in cover.
Jill Larkan, head of healthcare consulting at advisory firm GTC, says depending on what is in the package, members could possibly pay a lower premium but have lower cover.
Broomberg says that there appears to be no significant change in the application of co-payments. “At present, medical schemes are prevented from allowing co-payments for PMB conditions, and the new Bills maintain the linkage between a set of mandatory benefits and the prohibition on co-payments. They do not imply that there can be no co-payments on all services funded by medical schemes.”
While it is difficult to understand at this stage the impact on the costs of medical scheme cover, considering that the NHI funding proposal would require all individuals to contribute to NHI, it may increase the medical costs for those who wish to remain on a medical scheme as they will be paying a health tax as well. Broomberg however indicates that the Bills are silent on the funding of the NHI, which is a responsibility of National Treasury, which will likely exercise caution in implementing major tax increases. Moreover, moves to introduce a low-cost medical scheme benefit option towards mid-2019 will benefit individuals earning between R3 000 and R10 000 per month without the implementation of NHI.
This article first appeared in City Press.