Unaffordable medical scheme contributions: A barrier to access to private health cover in South Africa

T Fish,S Ramjee

doi:10.4102/sajbm.v38i3.586

Abstract

The purpose of the Medical Schemes Act, No. 131 of 1998 was inter alia to ‘promote non discriminatory access to privately funded health care’. A number of reforms were proposed as steps on a path to Social Health Insurance (SHI) with the ultimate goal of the reforms being to increase the number of people contributing to a private financing mechanism, thereby reducing the burden on the public sector.The increase in health care costs over time has been the focal point of industry discussions regarding affordability. In recent years the industry has responded positively to the affordability challenge by developing new products aimed at the lower end of the market. With medical inflation as a significant challenge, this paper argues that in 2003 the cost of entry-level medical scheme options was largely unaffordable and that this state of affairs has not improved over time. The proportion of the population covered by medical schemes declined marginally during the time period under review (2003 – 2006), despite the regulatory environment.The analysis, done from the perspective of a prospective medical scheme member, aims to identify the proportion of medical scheme options affordable to each of four ‘benchmark’ families.

Highlights

South Africa has a well organised and regulated formal private health insurance system, with contributions to private prepaid plans in 2003 comprising 77,7% of private expenditure on health (World Health Organisation, 2006: 179)
According to figures published by the Council for Medical Schemes, the absolute number of people covered by registered medical schemes increased slightly from 6,71m in
The purpose of the Medical Schemes Act was inter alia to ‘promote non-discriminatory access to privately funded health care’ (Council for Medical Schemes, 2003b: 2) through mechanisms such as open enrolment, community rating, and the re-introduction of a set of minimum benefits to be provided by all medical schemes

Summary

Introduction

South Africa has a well organised and regulated formal private health insurance system, with contributions to private prepaid plans in 2003 comprising 77,7% of private expenditure on health (World Health Organisation, 2006: 179). The purpose of the Medical Schemes Act was inter alia to ‘promote non-discriminatory access to privately funded health care’ (Council for Medical Schemes, 2003b: 2) through mechanisms such as open enrolment, community rating (as opposed to risk-rating by age and state of health), and the re-introduction of a set of minimum benefits to be provided by all medical schemes. These reforms are interim steps on a path to SHI and National Health Insurance. An aspect of improved access which has not been directly addressed by the reforms to date is that of affordability

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Conclusion