Rorisang Kgosana
Premium Journalist
2 minute read
22 Jun 2018
6:00 am

Motsoaledi targets medical aids with their reserve funds of R60bn

Rorisang Kgosana

'We don’t believe medical aids, by law, should be making profit. Huge amounts are in reserve but patients are required to pay more,' the health minister says.

Aaron Motsoaledi during a press briefing at GCIS in Pretoria, 21 June 2018, outlining the details of the National Health Insurance Bill and the Medical Schemes Amendment Bill. Picture: Jacques Nelles

Health Minister Aaron Motsoaledi took aim at the medical aid industry yesterday, promising to ban patient co-payments in claims; introduce legislation to stop medical aids from making profits … and he has his eye on their reserve funds, which allegedly total close to R60 billion.

Changes to the Medical Schemes Act, tabled through the Medical Schemes Amendment Bill, which Motsoaledi unveiled yesterday, will do all of these things, he promised … but the move could put medical aid profits and liquidity on the line.

The minister promised the real winners would be current medical aid contributors who, he said, would no longer be forced to contribute to their own bills.

The Medical Schemes Amendment Bill has been approved by Cabinet. Its first amendment would be the scrapping of co-payments, meaning beneficiaries would no longer be required to contribute a portion of their medical bill for undergoing medical procedures.

Medical aid schemes, however, would fork out the entire amount, he said.

In the last financial year, insurers paid R29 billion in co-payments; money which came directly from their pockets, he said.

“[Medical schemes] pay a portion of the bill and the rest of the money should be paid by the patient. This amendment means every cent attached to the patient should be settled by medical schemes and patients should not be burdened with paying anything.”

He said the department had information that showed that medical aid schemes were withholding close to R60 billion in reserves, which exceeds the mandatory 25% of reserved funding, amounting to 33% of the total reserve.

“These huge reserves were accumulated through high premiums. For the past 15 years, premiums have been increasing more than consumer price index … We don’t believe that medical aids, by law, should be making profit. Huge amounts are in reserve but patients are required to pay more.”

Medical scheme brokers will also be a thing of the past, as two-thirds of medical aid holders were not aware that their premium contributes R90 to brokers, totalling R2.2 billion paid to them, Motsoaledi said.

Discovery Health, the largest medical aid scheme in SA, said it would study the draft bill before commenting on how the change would affect it.

“The draft contains numerous complex amendments to the Medical Schemes Act,” Discovery Health CEO Jonathan Broomberg said. “We are still studying the details of the draft and will provide more detail on our views as soon as possible.”

Motsoaledi dismissed speculation that the new bill plans to destroy private healthcare.

He has appointed Judge Sandile Ngcobo to conduct an inquiry into the rising cost of health care. Those findings would be released on June 28, he said, adding that certain groups were rumoured to be trying to interdict those findings.

ALSO READ: Strata Healthcare barred from administering medical aid schemes

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