Medical aid reforms needed now, say experts

Professor Alex van den Heever of Wits says that health care reforms are urgently needed to allow medical aids to remain affordable for members. Image: Social Protection

This is according to health systems experts who spoke at the Africa Health conference in Midrand last week.

The reforms planned for medical aid schemes have been stalled since the ANC's Polokwane national conference in 2009, when the party decided it wanted a national health insurance scheme, according to Wits Professor Alex van den Heever.

He said that in the late 1990s medical aid schemes were prohibited from refusing to accept anyone as a member - but the planned measures to ensure that they would nevertheless remain financially sustainable were not put into effect.

Healthy subsidise the sick

This situation was making medical aid schemes less sustainable and costs less affordable.

Van den Heever said that medical aid schemes were designed to protect the sick and vulnerable. They may not refuse to accept a member, no matter how sick the applicant is. Neither can they charge older members more.

To stay afloat, medical aid schemes need sufficient young and healthy members to subsidise the sick. Risk equalisation was proposed in 2004 to spread the subsidisation load.

It would have allowed medical aid companies with a large proportion of sick and older people to share the risk with medical schemes that had many younger people as members.

But risk equalisation was not implemented. It is now being put forward as one of the reforms needed to sustain the industry.

"Medical aids are a regulatory orphan," said healthcare industry Actuary Barry Childs, adding that reform was needed urgently.

Medical aid reforms have been stalled for seven years whereas healthcare costs have risen at above the inflation rate each year.

A Competition Commission inquiry into healthcare costs is to begin in October. It will look at healthcare costs and policy reform.

Source: The Times via I-Net Bridge