OPINION |RAF's failure to compensate medical schemes threatens stability of healthcare system

Health insurance firms are entitled to claim from the fund as they also contribute to it

he RAF Act states that it is liable for compensating all road accident victims for the medical expenses they incur, provided they weren’t solely responsible for causing the accident, says the writer.
he RAF Act states that it is liable for compensating all road accident victims for the medical expenses they incur, provided they weren’t solely responsible for causing the accident, says the writer.

While the spotlight during Transport Month often falls on infrastructure and road safety, we cannot ignore the financial health of the road accident support system – it deserves equal focus.

Each year, thousands of people tragically die on our roads and thousands more are hospitalised or injured. The Road Accident Fund (RAF) was established to provide compulsory health cover for all users of South African roads with funds collected via a fuel levy.  

However, in a striking example of systemic failure, the RAF has repeatedly avoided its duty to reimburse medical schemes for healthcare expenses incurred in road accidents, ignoring multiple court rulings mandating these payments.

This puts the sustainability of medical schemes at risk, which provide health cover to over nine million South Africans.

We all contribute towards the RAF each time we start our cars or even use public transport like taxis. This is because the RAF is largely financed by a R2.18 per litre fuel levy, which is supposed to compensate victims of road accidents in SA. It used to be that if a person with medical scheme cover was involved in an accident, the RAF would reimburse the medical scheme if the member’s claims were approved by the fund.

The RAF Act states that it is liable for compensating all road accident victims for the medical expenses they incur, provided they weren’t solely responsible for causing the accident.

Yet, in August 2022 the RAF simply stopped paying medical schemes, issuing a directive that all medical expenses paid by medical schemes must be rejected.

This issue extends far beyond a legal dispute or financial inconvenience for medical schemes. The RAF’s failure impacts public health, entrenches inequality, and threatens the stability of SA’s healthcare system.

When the RAF withholds reimbursement, medical schemes are forced to increase premiums straining lower-income members. Many are then left with little choice but to leave their schemes, which ultimately results in heavier demand on an already overburdened public healthcare system.

Medical scheme members are entitled to claim from the RAF because they contribute to it in the same way that all other South Africans do.

There is an often-repeated inaccuracy that the more than nine million South Africans who are medical scheme members come from one wealthy, privileged group in the country. But the reality is that 68% of members come from previously disadvantaged groups. So, when medical schemes are forced to increase premiums to compensate for the RAF’s failure to pay, it is hard-working people from all backgrounds that are most impacted.

The RAF’s decision not to pay is unlawful. In 2022, the Pretoria high court ruled that the RAF may not withhold payments for past medical expenses incurred by medical aid members. The fund later appealed to the Supreme Court of Appeal and the Constitutional Court – both of which were unsuccessful. And yet, the fund continues to withhold payment.

The RAF has been taken back to court again this year, in an attempt to compel it to honour the previous court order and resume payment. Gauteng courts are already backlogged due to the large number of RAF cases on the roll, so this matter is just one of many which will no doubt drag on in the courts.

We therefore call on both the minister of transport and parliament, who have oversight over the RAF, to ensure that it delivers on its legal obligations and mandate.

Transport minister Barabara Creecy has already stepped in to demand a turnaround plan to manage the massive claims process backlog at the RAF in order to avoid even more cases being added to the Gauteng court roll.

While this is welcomed, it’s imperative that she also terminates the 2022 directive not to pay medical schemes and directs the RAF to immediately reimburse those funds which are currently owed. The board of healthcare funders has written to minister Creecy and deputy minister Mkhuleko Hlengwa requesting further engagement on this critical issue. 

It is clear that, as part of our transport sector, the RAF has an important socio-economic role to play, helping victims of accidents heal and re-integrate into society.

But its continued failure to pay undermines the viability of medical schemes and their ability to provide affordable, quality health coverage to millions of South Africans, which will place an increased burden on the public healthcare system over the longer term.

It is crucial that urgent action is taken by those who have oversight powers over the RAF, so it is compelled to fulfil its legal obligations. Every South African, whether they contribute to medical schemes or rely on public healthcare, deserves a system that works in their interest.

  • Mothudi is managing director of the Board of Healthcare Funders .

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