Renewed hope that a low-cost benefit option (LCBO) framework will soon become a feature of the South African healthcare funding landscape offers a practical step towards achieving quality healthcare for more people until the National Health Insurance (NHI) is fully realised.
The industry regulator, the Council for Medical Schemes [CMS] has rightfully indicated that the introduction of LCBOs should complement the rollout of NHI by expanding private healthcare coverage by making it affordable to more people.
The basket of services currently included in Prescribed Minimum Benefits ensures all medical scheme members have unlimited benefits for emergencies, maternity, and chronic conditions, including HIV, asthma, diabetes and many more severe health conditions. This means that irrespective of what members claim for these, a person has the security of knowing they will never have to pay out of their pocket for these conditions.
A slimmed-down list of covered conditions, focused on the most common and pressing health concerns, with a strong emphasis on preventative and primary healthcare, could meet most families’ health needs. Greater access to these services helps to reduce the need for hospitalisation, thereby easing pressure on the public health system to build long-term capacity.
The complexity of the NHI project is immense and the tax base to fund it is narrow. There will therefore need to be gradual steps towards addressing practical implications for society sustainably. For now, 8.9 million people are covered by medical aid, representing 15% of the South African population.
The introduction of low-cost benefit options could see this proportion growing with an estimated four million people, alleviating the public health system’s overwhelming patient numbers and creating the breathing space to improve quality care standards as envisioned under National Health Insurance.
The HFA (Health Funders Association) strives to offer a collective voice for constructive input and perspectives from health funders to help address broader challenges in South African healthcare and contribute to building the best possible version of universal health coverage for the future.
The time is ripe for a shake-up in the structure of healthcare funding models, and the regulatory provisions for primary healthcare and low-cost benefit options will see many more employed South Africans and their families accessing private healthcare, many of them for the first time.
Medical schemes have felt the pressure of increased claims since the pandemic, and the global financial fallout has also contributed to the local scenario of fewer new young, healthy people being able to afford traditional medical scheme membership as we know it.
In the last few years, the sustainability of the current model has been challenged and as a result, various medical schemes have merged and even liquidated. We need new ways of catering to the growing demand for more affordable options in private healthcare coverage.
It is unclear yet what the tax implications for these more affordable health cover products might be, and whether these funds are set to contribute towards the funding mechanism for NHI.
As it stands this tax season, many South African households receive tax rebates on their medical scheme contribution, which lightens the load on public health services. It has been previously suggested that removing this income tax credit could help fund either LCBOs or the NHI, however, in practical terms, a family of three with a household income of R20 000 per month would see their tax bill soar by some 27%.
Refreshing the regulatory framework for health coverage will enable the benefits of private healthcare to reach so many more South Africans who have never had access before. This would make enormous, revolutionary strides towards developing a healthier population and reducing the burden of disease so that public facilities could be in a better position to cope with in-hospital care for patients both now and when NHI is eventually fully implemented.
* Makatini is the, chief executive officer of the Health Funders Association
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