Profmed, a medical scheme, highlights the crossroads facing the health insurance market in 2024 as exemptions under the Medical Schemes Act are set to expire. This expiration raises significant concerns for thousands of South Africans regarding the sustainability of health insurance products and the potential impact on consumers nationwide.
According to Profmed CEO Craig Comrie, 2024 becomes a critical year for the health insurance market as exemptions granted under the Medical Schemes Act are due to expire in March.
“Without these exemptions, health insurance products may be forced to transition into medical schemes and will be subject to stringent regulatory requirements which will result in large premium increases,” he says.
Although Comrie believes health insurance products were always due to face this day, he says the impending expiration of exemptions poses significant challenges for consumers. With recent estimates of anywhere between 600,000 to 1.5 million South Africans relying on these products for healthcare coverage, he says the potential consequences of regulatory changes cannot be understated.
Comrie emphasises two major impacts: some individuals may transition into medical scheme environments, while many others may find themselves without coverage.
“This just underscores the importance of not delaying in purchasing sustainable medical cover. People need to seriously consider the implications and understand the difference between health insurance and medical aid,” says Comrie.
One of the key distinctions between health insurance and medical schemes lies in their ownership structure which drives motives behind these healthcare products. Medical schemes are owned by members and dedicated to servicing their healthcare needs while offering built-in protections for consumers. In contrast, health insurance products are operated by insurers who may prioritise profit motives and have shareholders who require a return on their investment. These disparities lead to differences in coverage, benefits and differences in care.
Furthermore, Comrie highlights the role of tax credits available only to members of medical schemes, further enhancing the affordability and value proposition of these schemes compared to health insurance alternatives.
Addressing concerns about the National Health Insurance (NHI) and its potential impact on low-cost insurance plans versus medical schemes, Comrie emphasises the need for sustainable solutions that prioritise consumer access to essential healthcare services. NHI at its start will focus on primary care benefits similar to the day to day benefits offered in medical schemes and the very basic benefits offered by health insurance products.
“Our economic reality is challenging for millions. Struggling with affordability and rising healthcare costs, policymakers need to consider the long-term implications of regulatory decisions,” he says
In response to the looming expiration of exemptions, Comrie says it is likely that health insurance companies will advocate for an extension. But this doesn’t change the policy makers need to deliver a clear framework for low-cost benefit options within the medical schemes space.
“As medical schemes we are beholden to the regulations through the Council for Medical Schemes (CMS),” asserts Comrie. “For years we have been advocating for low-cost benefit packages but to no avail. If we truly want to strike a balance when it comes to quality of care, we need to be able to offer products that bring in more South Africans with healthcare cover which removes pressure from the public sector system.”
As the healthcare landscape continues to evolve, Comrie remains committed to advocating for consumer rights and providing comprehensive healthcare solutions that prioritise affordability, transparency, and regulatory compliance.
“Beyond the NHI, I believe low-cost medical scheme cover will advance universal healthcare cover in South Africa. While health insurance may be a more affordable option, the benefits of a medical schemes will continue to outweigh the cost difference by a mile,” Comrie said.
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