New legislation around Medical Aid

Commentary by Anton Muller

 

https://businesstech.co.za/news/government/253207/these-are-the-10-massive-medical-aid-changes-you-need-to-know-about/?fbclid=IwAR2HA9bEjhEK3iYINsZF-IPmQtXJZW6jm_7uUt1VEqhIHUDYpVrmgPUkpuQ

Antler surrendered it's medical aid licence in approximately 2008 as medical aid is an area where risk of client dissatisfaction is huge. As a result this commentary is definitely not aimed at protecting our revenue.

This new bill (in our opinion) is dangerous in it's failings:

1) Medical aid membership in most cases is voluntary - this bill seeks to ensure further cross subsidisation from "rich" to poor - the expensive plans therefore must provide less value and the cheaper plans will provide more value. The natural response will be thousands of people migrating to cheaper plans.

2) To defend against 1 above, medical plan choice will have to be limited by income - you will have to be on plan X if you earn Y. - many people (particularly the healthy) would likely abandon medical aid membership rather than be forced to accept less value for the same spend. The result will be less healthy people to subsidise the unhealthy than currently.

3) "Late Joiner Penalties" - People are generally healthier when they are younger. Removing late joiner penalties will result in people waiting for their health to fail before joining a medical aid - weaker risk pool = higher premiums (for everyone) for the scheme to break even.

4) Removing the role of the broker is probably fine in most cases, but if you have ever had a claim rejected for an arbitrary reason by a medical aid, you will know the value of a broker. Those least able to take on a big corporation will be left with nowhere to turn.

"The present contribution table charges lower and higher-income patients the same amount for benefits, which is not the way the world should be,” Motsoaledi said." - Medical aid is a product that one buys off the shelf - IT IS NOT A PROGRESSIVE TAXATION SYSTEM. What comes next? Different pricing at the petrol station depending on your payslip???

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