Allowing Medical Schemes to compete with Health Insurance products will only protect the Consumer
2 Jun, 2023

Craig Comrie, Chief Executive Officer at Profmed


As the nation grapples with an ongoing cost of living crisis, many South Africans are looking for ways to tighten their belts. This is no different when it comes to healthcare coverage, but consumers should be aware of which products they choose.


According to Craig Comrie, Chief Executive Officer at Profmed, South Africa has a critical healthcare issue: the lack of consistent and affordable healthcare coverage for the ‘missing middle’ for recent graduates and entry-level professionals. These people desire healthcare coverage but cannot afford the current options available in the medical scheme market.


“This issue cannot be addressed by the proliferation of unregulated health insurance products that “are not medical scheme products” and provide very little cover to what is needed in this market. The framework for medical schemes to provide low-cost benefit options will allow medical schemes to outperform health insurance products partially because Schemes are not profit-driven but are owned by their members, while Insurers have shareholders to look after. The current lack of a Low-cost benefit option framework is a roadblock for the medical scheme industry who are keen to provide value-based affordable cover for consumers,” Comrie says.


He notes that budgets are under significant pressure where escalating interest rates now doubling mortgage bond repayment compared to 2 years ago. This means every family is seeking to cut costs across various aspects of daily life but compromising healthcare coverage may not be the wisest choice. This is why it is critical to understand the fundamental difference between the generous benefits offered by medical schemes and those provided by healthcare insurers.


He says medical schemes, although regarded as more expensive, provide comprehensive cover. On average, medical schemes pay in excess of 85% to 90% of claims and extend coverage to day-to-day medical expenses. Medical schemes also actively monitor treatment quality and offer various coverage options tailored to individual needs while providing a comprehensive set of benefits called prescribed minimum benefits.


In contrast, Comrie warns that healthcare insurance may seem cost-effective at first glance but have serious limitations. “These plans are not required to provide prescribed minimum benefits, leaving individuals responsible for settling their accounts and potentially facing unexpected expenses,” Comrie says.


Comrie notes that health insurance, which is often backed purely by profit motive, is not the solution to the coverage problems of the missing middle. He suggests that the medical schemes regulator release guidelines that allow medical schemes to compete in the low-cost health insurance space. Health insurance products are estimated to cover about 1,2 million individuals in the market, compared to medical schemes that cover 9 million individuals.


Comrie says there is a concern about the lack of proper regulation for health insurance products currently available in the market. While a dispensation was allowed by the Council for Medical Schemes (CMS) to enable these products to be propagated to the market, there is a need for proper regulation to ensure that consumers are protected from being exploited. The CMS should carefully review and withdraw any exemptions or licenses that currently exist in the health insurer space.


Comrie notes that the CMS provided eleven exemptions to the health insurance industry. This has pushed the regulator into a space where it must either withdraw these exemptions entirely or provide a framework for medical schemes to compete in the affordable product space.


“The Council for Medical Schemes needs to release guidelines to allow medical schemes to play in the low-cost benefit space. The Regulator needs to make decisions that promote fair competition between different healthcare coverage providers, whether they be Insurers or Medical Schemes. This is all for more affordable healthcare options and ultimately a healthier South Africa.”







@Craig Comrie, Profmed
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