Top-up or gap cover is not the main problem; the lack of pricing regulations for healthcare providers is, says the Principal Officer of Liberty Medical Scheme, Andrew Edwards.
Liberty Medical Scheme acknowledges that there are some pressing issues regarding the role played by certain health insurance products, however, the main problem is not so much the gap or top cover offered by short-term health insurers – the main focus in the draft Regulations – but rather the lack of pricing regulations for healthcare providers to sufficiently protect medical scheme members.
Scheme members charged excessive tariffs
The draft demarcation Regulations aim to ensure that health-insurance products, including gap cover, do not infringe on the Medical Schemes Act 131 of 1998 which governs medical schemes. Commenting on the draft Regulations, Liberty Medical Scheme’s Executive Principal Officer, Andrew Edwards, points out that in the current environment where there are no pricing regulations and a pricing commission to determine what a provider can charge, medical scheme members are exposed to unregulated, often excessive tariffs, irrespective of the option they choose.
According to Edwards, Government’s statement that members tend to buy down in terms of cover, supplementing their medical insurance with gap cover, has not been Liberty Medical Scheme’s experience. “We are finalising our own investigation and have found absolutely no proof that members are actually buying down. In fact, members primarily buy gap cover because of what providers charge. Should members buy down, it would create a gap in any event.”
“Because of the uncertainty of the whole pricing regimen, Liberty Medical Scheme actually supports gap and top up cover. Instead, Government should be focusing its attention on the issue of a pricing commission so that tariffs are within the means of medical schemes,” Edwards argues.
Hospital cover not total
In terms of insurance products, Edwards reiterates that it’s not the gap and top up cover that create the real problem, but certain inexpensive “hospital products” professing to cover everything when in fact they don’t, thus infringing on the key principles of social welfare, solidarity and cross-subsidisation found in medical aid schemes.
“The fact is that these purported “health-insurance” policies are not a substitute for medical aid scheme membership. Firstly, they do not guarantee members cover, nor do they cover Prescribed Minimum Benefits (PMBs). Secondly, they are not regulated in terms of protecting members like medical schemes and they themselves are not protected by a regulatory body, leaving the policyholder vulnerable.”
Contrary to public perception that all medical scheme options are expensive, schemes increasingly offer affordable, low-cost and entry-level options. Liberty Medical Scheme, for example, is on the verge of launching an innovative new product aimed at the young and healthy market which will offer them comprehensive and affordable benefits, thus ensuring great peace of mind, Edwards notes.
(Based on press release from Liberty Medical Scheme, May 2012)