The regulator says hospital-focused benefit designs worsen health inequalities and leave members paying billions in out-of-pocket expenses.
The Council for Medical Schemes (CMS) says contraceptives should be covered fully by medical aid.
Briefing the National Council of Provinces on the prospects and gaps of healthcare access in the country on Wednesday night, CMS chief executive and registrar Dr Musa Gumede said prescribed minimum benefits (PMBs) need to be updated to include primary healthcare, prevention and screening.
“We need to update the PMBs so that we use current evidence to include what should be covered,” Dr Gumede said.
PMBs are specified healthcare benefits that medical schemes are legally obliged to cover fully.
Impact of weak primary healthcare focus
Gumede also noted that the lack of focus on primary healthcare benefits is causing a fall in vaccination rates and preventative screening.
He said this results in worsened health issues due to late detection, which in turn leads to members spending more on healthcare.
It also has a disproportionate impact on underserved communities, who only seek medical attention when the situation is serious due to a lack of nearby service providers, Gumede said.
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“The current benefit designs are hospice-centric, focusing on hospitals and not primary healthcare. And that’s what we’re trying to change…”
Out-of-pocket expenses on the rise
Another issue identified by the CMS is the out-of-pocket expenses that members of medical schemes are subjected to, which increase financial hardships.
Their last 2023/24 industry report indicated that many members had to pay part of the core payments and deductibles upfront to service providers.
They paid a total of R43 billion during that period.
“Sometimes providers charge above what the schemes have agreed to with providers, and therefore there were tariff differences and people had to pay those differences,” Gumede said.
“Certain treatments were excluded and not covered, and people had to pay for those treatments directly.”
He noted that in some instances, the service providers referred to by a member or beneficiary may be out of reach, prompting individuals to seek assistance from those not listed but located in close proximity.
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Members are then confronted with copayments or having to cover the costs completely.
“Out of the R43 billion, we found that medicines take 35% of that amount, the specialists 28%, the allied and health professionals 14%, the general practitioners 9%, and then the rest of the disciplines take 14% of that.”
Financial protection for vulnerable groups
Gumede said the financial impact results in insufficient scheme support for vulnerable groups such as the elderly, cancer patients, and those being treated for mental illnesses.
He said for a scheme to function well, it requires solidarity-based financial support with balanced benefits for young and old, and rich and poor members.
“The products that we see sometimes in the marketplace attract the young and leave the sick to be alone. And those schemes with only the elderly tend to be quite expensive,” Gumede said.
“So, our aim is to try and get solidarity-based financial protection.”
Affordability challenges and CMS interventions
Other issues CMS flagged include the rise in unemployment affecting affordability of medical schemes, and inflation and tariffs on medical imports increasing the cost of medicine and devices.
Pressed about their interventions to ensure the affordability of medical schemes, Gumede said they are increasing visibility of their work and are empowering members to know what they are covered for.
He also said the CMS produces contribution increase guidelines to assist medical schemes to keep their packages affordable.
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