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Lifeline for low-cost doctor plans

Exemption that allows cheap health insurance plans to operate extended to 2022

Laura du Preez Money editor

Low-cost health insurance plans that give you access to private doctors for out-of-hospital care will be able to continue for another 18 months as insurance policies. 

The Covid-19 pandemic has increased interest in affordable healthcare cover.
The Covid-19 pandemic has increased interest in affordable healthcare cover.

Beyond March 2022, it is likely that low-cost health insurance plans will have to convert to a low-cost medical scheme option with benefits determined by the Council for Medical Schemes (CMS).

Last month, the medical scheme regulator reversed an early decision not to extend beyond March next year the exemption from the Medical Schemes Act that allows the insurance plans to operate. The exemption has now been extended until March 2022. 

The exemption allows insurers to offer almost half-a-million South Africans access to general practitioners, medicines and basic blood tests and X-rays in the private sector. Some plans also provide basic dental and optometry benefits.

These so-called primary health insurance plans do not provide all the minimum benefits that schemes are obliged to provide – particularly the hospital benefits and in many cases ongoing medication for common chronic illnesses.

This makes it possible for insurers to provide these plans for much less than the cheapest scheme – they cost on average R800 for a family while medical schemes charge more than this for a single member.

The council has again emphasised that it wants the insurance plans to transform into low-cost medical scheme options, but it says the Covid-19 pandemic delayed planned meetings to address the problems insurers have complying with the act and to develop scheme options for low earners. 

Many primary healthcare plans are sold bundled with other insurance policies such as hospital cash plans – that pay a limited daily amount if you are hospitalised – or dread disease policies that pay out a lump sum on diagnosis of a severe illness like cancer. 

One of the conditions of the exemption insurers have been granted is that the policies be sold separately and with adequate warning that they are not medical schemes. 

Vernon Chorn, the CEO of Unity Health which provides primary healthcare benefits to 40,000 people, says Unity is working with the council and he is confident that whatever happens those who currently enjoy cover will not lose it.

Chorn says the pandemic has increased interest in healthcare cover, but many people are struggling to keep up their premiums, which has slowed the take up of the policies.

He says premiums will probably increase by 5% to 6% next year to give GPs a 6% increase following their loss of income this year due to the pandemic. 

When it initially refused to extend the exemption for the primary healthcare policies beyond next year, the CMS said the products were expensive and spending much less on healthcare benefits (about half your premium) than medical schemes (about 90% of your contributions). 

Chorn says he hopes the council will properly research the costs providers have to meet to manage the doctor networks that provide policyholders with benefits and the commission that has to be paid to brokers who sell the policies. Some fixed operating costs cannot be reduced, he says. This makes the costs appear high relative to the premiums that are lower than those for medical schemes.

Chorn expects the low-cost scheme options will be able to offer a lower tier of minimum benefits than other medical schemes but says much detail still has to be worked out, including the legal process to convert insurance products into medical scheme options.  

Richard Blackman, the CEO of Day1 Health, is less optimistic and says the council’s main objective is to eradicate any form of legitimate competition and they are failing to protect those who do not belong to the  "privileged class" who can afford medical scheme membership. 

Blackman says the council’s decisions make no sense, but constitutionally they will not succeed in taking private healthcare benefits away from employees, union members, the informal sector, the elderly and all others who cannot afford medical scheme cover. 

Meanwhile, private healthcare group Netcare is selling NetcarePlus GP vouchers which give you access to any one of 500 GPs in the Netcare network at lower rates than medical scheme members pay. 

You can buy the vouchers online, for yourself or as a gift for a family member, friend or employee, Teshlin Akaloo, managing director of Netcare’s Innovative Products division, says. The vouchers are also available through the FNB app and eBucks online shop. 

The benefit can easily be transferred to someone as the code is sent via SMS.

Vouchers cover in-person GP consultations (R350), in-person consultations plus acute medicines (R430) or virtual consultations (R290).