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Government rumblings have insurers running for coverThe department intends ensuring that all South Africans in formal employment pay their way for health care THERE isn't a sector of the health-care industry which will be left untouched by the policy changes planned by the Department of Health. The majority of the changes are intended to improve the quality of care - but most of us are likely to pay more. The plans will also ruffle the feathers of doctors, hospitals and many other providers whose activities will be closely monitored. Many of the legislative changes will be introduced over the next eight months. Among these will be a National Health Bill, implementation of the department's drug policy and a White Paper on health. The department is close to completing its final draft regulations for financing in the private sector -- the regulation of medical aids and insurance companies offering health-care products. The regulations will be aimed, says Health Department director-general Dr Olive Shisana, at minimising the continuing escalation of costs in medical schemes. Certain insurance products, which provide financing for health care for the younger and healthier members of society while not providing for older people, will be targeted. Older and sicker people are often either not insured by these companies, or premiums are so high that they will probably not be able to afford the cover. Medical schemes will have to obtain a "community rating" to be registered and this will, if the team drafting the regulations gets its way, ensure continued tax breaks worth R4-billion a year on the contributions to such medical schemes. The department would like to see schemes provide medical cover "from the cradle to the grave". The schemes will have to provide a basic minimum package to members. The package has not been determined in detail, but it will most likely take the form of a "negative" list with items excluded for basic cover, such as cosmetic surgery. Members who opt to join late in life or when they become sick will face some form of penalty. "There is a tendency for insurers to skim the younger and healthier off the top," says Shisana. "It removes from other medical schemes the very people who would be subsidising the elderly and the sick."
The likely vehicle to encourage compliance will be the tax incentive. Those schemes not registered will not benefit from the tax incentive. The registrar for medical schemes will also have its status and functions beefed up, so that the behaviour of schemes can be monitored and the law enforced. The Department of Health intends to reduce the amount of fraud in the system. Included in the proposed regulations are ways of regulating the administration of medical aid schemes. At present the industry is dominated by administrators who run the schemes. While the schemes may not make a profit, administrators may. The department would like to see fewer adminstrators and more medical scheme members represented on boards, with measures in place to minimise the potential for conflict of interest. Administrators have no financial incentive to keep premiums and costs to members down, she says. These proposals have been welcomed by some medical aid schemes within the Representative Association for Medical Schemes, but have caused disquiet among others, mainly those which use risk- rating criteria which will not survive the community rating process. These companies claim the proposed regulations will drive costs up and push consumers out of the system altogether. These consumers will then use the state's facilities, without paying enough for treatment. The department intends ensuring that all South Africans in formal employment, whether they are covered by medical aid schemes or not, pay their way for health care and do not burden the state with these costs. To this end, says Shisana, all people in formal employment will be forced to take out a mandatory package of basic health care - a National Health Insurance plan - which will cover things like the use of hospitals when necessary. This will be in addition to any medical aid the employee already has. Although Shisana referred to this plan as the department's view, a task team is working on the issue and has four different options on the table. Not all of these will see all South Africans covered by the NHI. Other options may see those covered by medical aids not having to contribute to the NHI.
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