The Health Funders Association (HFA) has launched a legal challenge against the National Health Insurance (NHI) Act. The organisation filed its application on the 4th of June in the Pretoria High Court, challenging the Act on constitutional grounds. This marks the sixth legal challenge against the Bill, with others being brought by professional medical associations and other healthcare funding associations.
“South Africa needs a healthcare system that delivers equitable, quality care to all. We fully support that vision,” said Thoneshan Naidoo, the HFA’s chief executive. “However, in its current form, and without private sector collaboration, the NHI Act is fiscally impossible and operationally unworkable, and threatens the stability of the economy and health system, impacting everyone in South Africa.”
Prior to this, the Board of Health Funders had launched its own legal effort to have President Cyril Ramaphosa make public his decision-making process for approving the NHI Bill. So far, he has refused, arguing that opponents would lead to a courtroom “fishing expedition” in search of flawed reasoning.
HFA pointed to research that it had commissioned from economic consultancy Genesis Analytics. The Genesis report showed that unsustainable tax increases were necessary to fund NHI, while also reducing healthcare access for members of medical schemes.
NHI unaffordable even with generous assumptions
Assuming a cost efficiency of 45.5% from state-centralised healthcare funding, R15 432 per capita expenditure would be required, which works out to R941 billion for South Africa’s 61 million. (For comparison, the 2024 budget for US space agency NASA was R440 bn.) This is a 77% increase over SA’s total of R532.2bn for public and private healthcare expenditure in 2022, making healthcare 33% of the budget. Personal income tax rates would rise to over 40% for even the lowest income bracket – more than doubling from 18.5%. The highest income bracket would increase from 45% to 68.4%. Those earning R92 000 a year would have R10 000 less income – if they were already paying for medical aid. If not, that would be R21 000. [One wonders how South Africa can afford this when we cannot easily replace the US$500 million worth of US aid for HIV and other healthcare programmes under PEPFAR. – Ed.]
“Such tax increases are fiscally impossible, particularly given South Africa’s narrow personal income tax base of 7.4 million taxpayers,” the HFA said.
The HFA also argued that the NHI is not a reasonable solution to the constitutional requirement for progressive realisation of the right to healthcare. By making private healthcare only valid for conditions not covered by the NHI, its much-maligned Section 33 infringes on individuals’ healthcare access. Legislative authority is delegated to the Minister of Health, violating the constitutional separation of legislature and executive power. It is fertile ground for tenderpreneurs, as discussed by Jeff Wicks in a News24 article (paywalled). The HFA also notes that the government has admitted in legislation brought by Solidarity that no thorough NHI costing was performed.
Healthcare quality impacted
Even if South Africa were to find the money for NHI between the couch cushions, there have to be skilled people who can provide the services. Nearly 300 000 healthcare professionals would be required, and given the time needed to train new ones, there would be a huge strain.
Worse, analysis shows that the NHI will make things even worse than they currently are. According to Naidoo, “what NHI will do actually is worse than healthcare for the uninsured because combining your medical scheme population, who are older, within a single risk pool, will actually usurp more funds and actually disadvantage the vulnerable.”
But the country is not without options and inherent advantages, Naidoo says, citing the strengths of its private healthcare system. “We can bring to the table the skills, the knowledge and experience on how to build a sustainable funding solution for the entire country. So that’s what we can bring, and we want to make sure we build this country for everyone.”
Lungile Kasapato, Chief Executive Officer of PPO Serve
The South African commercial health sector is at a critical juncture, grappling with a severe imbalance that threatens its sustainability and the accessibility of quality care. The dominance of the hospital sector and the deficient state of primary care, are creating an unsustainable system that demands urgent reform, says Chief Executive Officer of PPO Serve, Lungile Kasapato, speaking at the Board of Healthcare Funders (BHF) conference, held in Cape Town from 10-14 May.
“Primary care in the South African commercial health sector is underpowered, compared with a dominant hospital sector, that is pulling the system off-kilter, as a consequence,” Kasapato said.
She identifies a weak and disjointed primary care system as a key driver of this imbalance, underfunded by limited out of hospital benefits and exacerbated by the fee-for-service payment model, which incentivises fragmented care and counterproductive competition. This model leads to GPs competing with specialists for limited out-of-hospital benefits, hindering the collaborative approach needed for optimal patient outcomes.
“Incentives exist to deliver high volumes of covered services, rather than those which will produce the best outcomes and value,” she explains, highlighting the misalignment of financial incentives that the patient, and the medical scheme, needs.
The problem is further compounded by managed care models, which Kasapato suggests can inappropriately shift clinical accountability to funders who lack direct patient interaction. She is also wary of the conflicting roles of scheme administrators, who can profit from being both payers and providers, undermining the “not for profit” ethos of medical schemes and stifling innovation.
Kasapato stresses the crucial role of payers in strategically purchasing care from professionals working in multidisciplinary care teams. By doing so, payers foster healthy competition among these teams, with performance measured by outcomes and efficiency. She points to the contracting model between Government Employees Medical Scheme (GEMS) and PPO Serve’s The Value Care Team as an example, which involves a monthly global fee, adjusted for patient risk. Significant additional fees are linked to performance.
The effectiveness of this approach has been demonstrated in a three-year pilot with GEMS, which resulted in a 29.6% reduction in medical admissions and a 7% decrease in patient bed days, along with a 39% increase in flu vaccine uptake amongst at-risk patients. “That’s not just better care – it’s better use of every rand spent,” she said, highlighting the financial benefits of improved care co-ordination.
Kasapato proposes a fundamental shift towards healthy partnerships built around multidisciplinary GP-led teams. This is the approach of The Value Care Team, which emphasises co-ordinated care delivery. In this approach, clinical teams, allied health workers, alternative care facilities, and community-based organisations are integrated, with care co-ordinators guiding patients through the system. This structure aims to reduce waste, minimise unnecessary hospitalisations, and prioritise preventative care.
“Teams work together to deliver quality, efficient care within local resources, including collaboration with allied health workers, alternative care facilities and community-based organisations,” explains Kasapato.
Looking ahead, Kasapato stresses the urgency of addressing unhealthy competition and rebalancing the system to ensure long-term sustainability and progress towards universal healthcare. She cautions against short-sighted solutions like discounted fee-for-service networks and scheme-led managed care, which offer only temporary relief.
“After decades of imbalance, we’ve found ourselves in a situation where the vast majority of people living in South Africa cannot afford to access our badly structured healthcare resources,” says Kasapato.
Instead of sustaining a flawed system with solutions like isolated telehealth and pharmacy nurse clinics, Kasapato is calling for a fundamental transformation; “Let’s stop propping up a system in need of transformation and focus our efforts on partnerships that strengthen primary care delivery, bringing it into balance with hospital-based care and addressing the major challenges that the commercial sector is facing.”
By Raynold Tlhavani, Partner & Micaela Pather, Senior Associate from Webber Wentzel
The recent judgment in Moss v Road Accident Fund,1 handed down by the Western Cape High Court, has reignited debate regarding the Road Accident Fund’s (RAF’s) liability to compensate accident victims for past medical expenses already covered by their medical aid.
If this sounds familiar, that’s because it is. Recently, the same court in Rahldeyah Esack v the Road Accident Fund1 dealt with the same legal question raised in Moss: can a claimant’s right to compensation under the RAF Act 56 of 1996 be diminished by third-party payments? The court in Moss followed the earlier ruling in Esack, which held that the RAF is liable for a claimant’s past hospital and medical expenses, even if these were covered by a medical scheme.
The facts in Moss were that, in September 2017, the 77-year-old plaintiff sustained bodily injuries when he was struck by a vehicle while cycling. He claimed ZAR 34 286.59 in past medical expenses, of which ZAR 4 173.80 had been paid out of pocket, while the balance had been settled by his medical aid. The RAF opposed the claim, relying on its internal directives from 2022 and 2023, which instructed staff to reject past medical expense claims where the expenses had already been paid by a medical scheme. These directives were not formally introduced before the court. The defence was described as ill-conceived and procedurally inappropriate. Although the court declined to rule substantively on the legal issues raised by the RAF’s directives, it noted that the directive touches on complex areas of law, including common and statutory law, champerty, subrogation, and medical scheme law, which it would not address in context of this judgment.
The court also remarked on the RAF’s litigation practices, observing that the fund had drastically reduced its reliance on external counsel and instead “overburdened” a handful of attorneys at the State Attorney’s office.
It noted with concern that counsel from previously disadvantaged backgrounds, who had historically relied on RAF work, were no longer being briefed, undermining transformation imperatives. It further highlighted the impact on practitioners who, through no fault of their own, were forced to juggle multiple RAF matters in a single day.
Ultimately, the court’s decision in Moss mirrored that in Esack, granting the plaintiff a full award for past medical expenses, regardless of third-party payments. It remains to be seen whether this approach in the Western Cape Division, at odds with a Full Bench decision of the Gauteng Division, will gain traction in other divisions.
Dr Ali Hamdulay, Chief Executive Officer (CEO) of Metropolitan Health, a subsidiary of Momentum Health
As we commemorate Universal Health Coverage (UHC) Day on Thursday, 12 December 2024, it is essential to reflect on the progress made in advancing healthcare access and quality in South Africa. Universal health coverage means ensuring that all individuals and communities receive the health services they need without facing economic barriers. In the South African context, this involves addressing the disparities in our healthcare sectors and ensuring that every citizen, regardless of their financial or social status, has equitable access to quality care.
In South Africa, a large portion of the population lacks medical protection cover, underscoring the urgent need for affordable healthcare solutions. Employed and insured individuals seek comprehensive yet affordable healthcare, while the employed but uninsured (6 to 8 million) face financial strain accessing quality care. Workers in the informal sector and SMEs often lack medical cover too, exposing them to significant out-of-pocket expenses. Those unable to afford any medical funding rely heavily on overburdened public healthcare facilities, highlighting the necessity for accessible and inclusive universal healthcare across all economic groups.
For over 60 years, South Africa’s healthcare sector has been characterised by a dual system of providers. Government has invested heavily in healthcare infrastructure and services and has made notable strides in improving access to quality healthcare. However, there is a significant opportunity for greater collaboration and meaningful partnerships within South Africa’s healthcare sector, focused on developing solutions that cater to the diverse needs of the population.
The healthcare ecosystem relies on the interdependence of various role players, including healthcare professionals, facilities, funders, administrators and government entities. Each of these contributors play a crucial role in ensuring the health and wellbeing of every citizen.
For the system to be sustainable, we must understand, recognise and cater to the unique contributions and requirements of each role player. This approach is vital for maintaining service continuity, quality, and access to necessary healthcare services through collaboration. Effective partnerships across these functions are critical to the success of the healthcare ecosystem.
To address the needs of low-income earners who are privately employed but uninsured, Momentum Health launched Health4Me, a healthcare insurance product that enables employer groups to provide affordable healthcare cover to those who might not otherwise be able to afford it. Our approach goes beyond merely paying claims; we focus on promoting health, wellbeing, and productivity, ultimately enhancing quality of life. This is achieved through primary healthcare facilities, technology, and incentivising wellbeing. The rapid growth of this healthcare insurance solution speaks to its success and its impact on offering more healthcare for more South Africans, for less. By expanding access to universal healthcare through primary healthcare, technological capabilities, and healthcare-strengthening initiatives, there are opportunities to collaborate and address the needs of additional population cohorts.
Through our vast experience in the design and management of healthcare solutions, we have learned valuable lessons that enable us to effectively collaborate across sectors. One of the critical lessons is the importance of clear communication and defined roles for all stakeholders involved in working towards establishing universal healthcare access. Successful partnerships have demonstrated that when goals are aligned across sectors to achieve a common objective, such as improving patient outcomes, success is possible.
As such, the success of creating a healthcare sector that ensures access for all hinges on flexibility and adaptability. The healthcare landscape is constantly evolving, and partnerships must be adaptable to address new challenges and opportunities. This includes being open to innovative solutions and technologies that can enhance service delivery and patient care.
Healthcare is essential not only for individuals and households, but also as a cornerstone of the economy. Without a healthy workforce, productivity declines, leading to far-reaching ripple effects on business sustainability. In this evolving landscape, preventative measures, therefore, become increasingly important. Providing wellness programmes that support both the mental and physical wellbeing of employees is crucial. Equally important is equipping healthcare consumers with the tools and knowledge to understand and improve their health status.
By investing in community health programmes and early interventions, we can address health issues before they escalate, easing the burden on healthcare systems. Collaboration across sectors can significantly increase access to preventative care by leveraging the resources and expertise of both sectors. Integrating preventative care into primary healthcare shifts the focus from reactive to proactive care.
It is advantageous to focus on co-creating platforms and mutually solving for the needs of our population through collaboration. This approach fosters consistency in service delivery and builds trust between entities. Metropolitan Health, a subsidiary of Momentum Health, has demonstrated its commitment to health strengthening by supporting leadership and professional development through its partnership with the National School of Government. By sharing and imparting knowledge, we are supporting the education and empowerment of future healthcare leaders through regular joint training and capacity-building programmes. This further improves collaboration by fostering a culture of continuous learning and development.
Building on these collaborative efforts, innovative models such as health hubs can further enhance healthcare delivery. These hubs combine offerings from both sectors, providing a range of services from primary care to specialised treatments under one roof. Telehealth is another innovative approach that has shown great promise. By utilising digital platforms, we can extend healthcare services to remote and underserved areas, ensuring that more people have access to quality care.
While effective collaboration is key to providing access to quality healthcare for more people, success cannot be achieved without fostering an environment that encourages innovation and supports conducive partnership development. By creating a more enabling environment, we can facilitate smoother collaboration and attract more private sector investment in healthcare.
Looking towards 2025, the vision for healthcare in South Africa is one of greater access, integration, and collaboration. By working together, we can create a more resilient and responsive healthcare system that meets the needs of all citizens. I envision the future of healthcare delivery as one that drives innovation and improves access to care. By leveraging partnerships and co-creation, I believe we can make significant strides towards achieving universal health coverage and ensure that no one is left behind.
By James White, Director of Sales and Marketing at Turnberry Management Risk Solutions
Photo by Alex Green on Unsplash
As South Africans prepare to review their medical aid plans ahead of the window for change leading up to December, many are grappling with the difficult decision of whether to downgrade their cover. Rising costs and ongoing economic pressures have led an increasing number of individuals and families to seek more affordable medical aid options. However, while downgrading may be an immediate cost-saving measure, it is crucial to understand how this decision impacts overall coverage and why adding gap cover should be a vital part of your strategy.
The consequences of downgrading medical aid plans
In 2025, medical aid contributions are expected to rise significantly, with many schemes projecting increases in the 10-15% range, far outstripping the Consumer Price Index (CPI) and most people’s salary increases. These hikes pose a major financial challenge, especially for the average family whose income growth may not keep pace with the rising costs of healthcare. As a result, many are choosing to downgrade from comprehensive plans to more affordable options, often focusing on hospital cover while choosing to manage day-to-day medical expenses out-of-pocket.
However, downgrading often comes with hidden costs. Lower-tier medical aid plans may only cover 100-200% of the scheme rate, while medical specialists and healthcare providers frequently charge significantly more than this. This leaves you vulnerable to substantial out-of-pocket expenses, particularly for specialist care or hospital procedures. As a result, gap cover, which is designed to cover the shortfall between what medical schemes pay and what healthcare providers charge, becomes increasingly essential when downgrading your medical aid.
The vital role of gap cover
When you downgrade your medical aid plan, you may face more co-payments, reduced benefits, and sub-limits on procedures that previously had unlimited coverage. Gap cover serves as a critical financial buffer, protecting you from these unexpected medical expense shortfalls. However, it is important to note that many medical aids are making changes to existing plans for 2025, with increased co-payments and reduced benefits, and potential sub-limits on procedures that previously had full coverage. This means you need to be more informed than ever, not only if you are thinking of downgrading, because changes may affect your existing plan as well.
By incorporating gap cover, you can safeguard against these potential shortfalls and ensure that you are not caught off-guard by additional expenses. This safety net can help you navigate the complex and evolving healthcare landscape in South Africa, ensuring that you remain adequately covered, even in challenging economic times, particularly as medical schemes change the way their cover operates.
Evaluating your medical aid and gap cover options
When reviewing your medical aid policy, it is essential to assess how well it meets your current and future needs, including factors such as affordability and coverage limits. Navigating the complexity of this often requires expert advice, which is why your broker is an invaluable resource. Brokers have an in-depth understanding of the medical aid landscape and can guide you in making the most informed decision for your unique needs, whether you are downgrading your plan or considering other options.
Your broker can help you understand the potential shortfalls that come with a downgrade and ensure you have the right gap cover to supplement your plan. They will also assist you in reviewing your policy schedule, interpreting medical aid terminology, and comparing plans to ensure that you are fully aware of the benefits and changes heading into 2025. The right broker will work with you to find a medical aid plan and gap cover that align with your life stage, financial situation, and healthcare needs.
Ultimately, working with your broker to ensure you have the right medical aid plan and gap cover will provide peace of mind and protect your financial wellbeing in an ever-changing healthcare environment. With the right guidance from a knowledgeable broker, you can make informed decisions that safeguard both your healthcare and your financial future.
About Turnberry Management Risk Solutions
Founded in 2001, Turnberry is a registered financial services provider (FSP no. 36571) that specialises in Accident and Health Insurance, Travel Insurance, and Funeral Cover.
With extensive experience across healthcare and insurance industries in South Africa, Turnberry offers unsurpassed service to Brokers and clients. Turnberry’s gap cover products are available to clients on all medical aid schemes, as they are independently provided and are therefore transferable in the event of a change in the client’s medical aid scheme.
Turnberry is well represented nationally, with its Head Office based in Bedfordview, Johannesburg with Business Development Managers in Cape Town and Durban. The Turnberry Team’s focus on outstanding client service comes from having extensive knowledge and experience in the financial services sector and is underwritten by Lombard Insurance Company Limited. Lombard Insurance Company Limited is an Authorised Financial Services Provider (FSP 1596) and Insurer conducting non-life insurance business.
By Reo Botes, Managing Executive at Essential Employee Benefits
Cross-subsidising medical aid contributions is a long-standing practice in South Africa and is and one of the benefits companies can use to make themselves stand out as employers of choice. This approach allows employers to support their employees in managing healthcare costs, which can be particularly burdensome in a country where healthcare expenses continue to rise. However, despite this subsidy, medical aid remains unaffordable for many individuals, especially those in lower income brackets and even for middle-income earners. The reality is that even if half of the cost is subsidised by their employer, many employees find it challenging to allocate a significant portion of their income toward medical aid contributions.
The challenge of affordability
The affordability challenge is exacerbated by the annual increases in medical aid contributions, which frequently exceed the rate of salary increases. For instance, a medical aid plan that costs R2,000 a month will still require the employee to pay R1,000 a month should the employer subsidise at least 50%. For someone earning a modest salary, such as entry-level employees, this R1,000 can represent a substantial chunk of their monthly income, making it an untenable option, this means that the employee then loses out on this benefit if the only employee benefit option is medical aid.
Furthermore, medical inflation has continued to soar, leading to dramatic increases in the cost of even entry-level medical aid plans. These plans, which were once within reach for some, have become prohibitively expensive. The rising cost of living, coupled with stagnant wages, has forced many individuals to reconsider their insurance cover. With limited options available when employers subsidise the costs, employees often find themselves in a difficult position, needing to balance health needs with financial realities.
The need for alternative solutions
Given these challenges, it has become increasingly important for businesses to explore additional more affordable healthcare options in the mix. While this may introduce some administrative tasks, the decision ultimately boils down to whether the cost of the employee not being able to perform their tasks optimally outweighs the costs of a Health Insurance solution. The key is to find the balance between keeping people healthy and productive, which necessitates a shift towards enhancing accessible health products.
There is an obvious and direct correlation between employee health and productivity, and so the primary objective of employee healthcare benefits should always be to maximise employee health. Including alternative subsidised healthcare options, particularly for lower-income earners and those looking to step down their cover, allows employers to provide greater choice and flexibility. This not only benefits employees but can positively impact the company’s bottom line.
Health insurance products offer a cost-effective solution that enhances access to healthcare at a fraction of the cost of medical aid. While this type of insurance is not as comprehensive as medical aid, it is significantly more affordable. When subsidised by employers, health insurance can cost employees just a few hundred Rands a month, making it a feasible option for many.
Depending on the provider and product suite, health insurance can supply access to primary or day-to-day healthcare services, including optometry and dentistry, as well as cover for in-hospital procedures in a private hospital. This accessibility empowers employees to seek the treatment they need without the additional stress associated with financial strain and affordability, the outcome being a healthier, happier, and ultimately more productive and profitable workforce.
The importance of employee health
Healthy employees are more engaged and productive, which ultimately benefits the employer. Ensuring that employees have access to preventive care and timely treatment, allows companies to reduce absenteeism and increase job satisfaction This creates a mutually beneficial situation where employees feel their health needs are supported, and employers benefit from a stable, healthy and productive employee base.
Moreover, as the landscape of healthcare continues to evolve, businesses must remain agile and responsive to the changing needs of their employees. This includes recognising the importance of mental health and wellness programmes as part of a comprehensive employee benefits package. By prioritising employee health, companies can foster a positive workplace culture that attracts and retains top talent.
The role of employers in promoting wellness
Employers play a crucial role in promoting employee wellness beyond just providing healthcare benefits. By fostering a work environment that encourages healthy habits, employers can positively impact the overall well-being of their workforce. This can include initiatives such as:
Providing healthy snack options and encouraging regular breaks
Organising fitness challenges or subsidising gym memberships
Offering mental health support and resources
Promoting work-life balance and flexible work arrangements
Educating employees on the importance of preventive care and regular check-ups
When employees feel supported in their health and wellness goals, they are more likely to be engaged, motivated, and productive in their work. This, in turn, contributes to the overall success and competitiveness of the organisation.
The impact on employee retention and recruitment
Offering comprehensive and affordable healthcare benefits can significantly impact employee retention and recruitment. In today’s competitive job market, potential employees often prioritise companies that demonstrate a commitment to their well-being. By providing a robust healthcare benefits package that includes subsidised medical aid and health insurance options, employers can position themselves as an employer of choice.
Moreover, retaining talented employees becomes easier when they feel valued and supported by their employer. By investing in their employees’ health, companies can foster a sense of loyalty and commitment, reducing costly staff turnover rates, which ensures continuity in their workforce.
The ongoing challenges surrounding medical aid affordability in South Africa highlight the need for innovative solutions that prioritise employee health and well-being. By expanding the range of healthcare options available to employees, businesses can enhance access to necessary medical services while also addressing the financial burdens that many individuals face.
As the healthcare landscape continues to change, it is crucial for employers to stay informed and proactive in their approach to employee benefits. By investing in the health of their workforce, companies not only contribute to the well-being of their employees but also position themselves as desirable employers in a competitive job market. Ultimately, the goal should be to create a healthier, more productive workforce that can thrive in the face of ongoing economic challenges.
Incorporating health insurance into employee benefit packages is a cost-effective strategy to achieve this objective. While it’s not necessary to complicate matters with an array of product options, offering more affordable choices aligned to the employee segment is crucial. Partnering with an independent advisor or engaging with different product suppliers can assist businesses in understanding the broader spectrum of available products and selecting a basket that will offer the best balance between benefit and affordability for all parties concerned.
The idea of mandatory medical scheme coverage for employed people has made a comeback after the case for it was made at a recent conference. The policy move was previously on the cards in South Africa but faded after the ANC opted for National Health Insurance (NHI) at its 2007 national congress where Jacob Zuma was elected as the party’s new leader. Chris Bateman unpacks how a system with mandatory medical scheme membership for the employed might work and asked local experts whether it represents a viable alternative to government’s NHI plans.
A vigorous public debate has ensued since outgoing Netcare CEO, Dr Richard Friedland, on behalf of the Hospital Association of South Africa (HASA) delivered a strongly argued case for a return to what he described as the original ANC healthcare plan. He was speaking on “Viable and Near-term Opportunities to Providing Enhanced Healthcare in South Africa,” at HASA’s annual conference in Sandton held early in September.
Since then, the leadership of Business Unity SA (BUSA) met with President Cyril Ramaphosa and Health Minister Dr Aaron Motsoaledi, and his deputy and other senior officials, in mid-September to discuss “matters of concern” related to the NHI. The President requested BUSA to put forward specific proposals on “the remaining matters of concern” as a basis for re-engagement.
Some observers have suggested to Spotlight that these consultations are a first sign of government openness to changing or tweaking its NHI plans. But whether this means the door is actually open for a system of mandatory health insurance, or for mandatory health insurance as a stepping-stone toward NHI, is still unclear.
The NHI Act, that was signed into law by Ramaphosa in May, envisages a single-payer system where medical schemes are only allowed to cover health services that are not covered by the NHI fund.
How mandatory health insurance would work
Under mandatory health insurance, everyone who is in formal employment, or who earns above a certain threshold, would be forced by law to be a member of a medical scheme. This will result in medical scheme membership swelling substantially and some pressure being taken off the public healthcare system. It is also expected to result in medical scheme premiums being reduced because more healthy, younger people will join the schemes. People who are unemployed or who cannot afford health insurance will still be dependent on the public healthcare system.
Friedland said such mandatory healthcare insurance will triple the medical scheme market from 9.2 million to potentially 27.5 million beneficiaries over time and reduce those dependent on the state from 53.8 million to 35.5 million. In so doing, it would boost public healthcare per capita spending by 52%, (from R5 054 to R7 659), without any additional funding of the public sector budget, alleviate the strain on public hospitals and clinics, shorten waiting lists, and free up money to hire more staff and improve infrastructure. He said it is a “far faster and more efficient tool” for achieving health equity.
Responding to the counter argument that a mandatory health insurance system would entrench existing health inequalities, Professor Alex van den Heever, Chair of Social Security Systems Administration and Management Studies at the University of the Witwatersrand, said the opposite is true. “It accelerates convergence between the two systems faster than the NHI proposals,” he told Spotlight.
The relief for people who can afford medical scheme cover could also be significant. Friedland said mandatory medical scheme membership would bring more young and healthy people into the system, thus reducing the cost of monthly premiums by 25% to 30%.
Mandatory contribution schemes for civil servants have been implemented in more than half of the countries in Africa, while Thailand and many other Asian countries have started with mandatory cover for the formal sector before expanding to the non-formal sector. Such systems with what amounts to many medical schemes, rather than a single large fund, are also in place in several European countries, including the Netherlands and Germany.
Not a new idea
Mandatory health insurance, or an expanded role for medical schemes, are by no means new ideas in South Africa. Friedland told Spotlight that the ANC government’s own broad ranging 2002 inquiry into the various social security aspects of the South African health system concluded that national health insurance or the complete nationalisation of the private sector, could not be seriously considered as a reasonable option. (The inquiry itself was based on the Health Subcommittee Findings of the Committee of Inquiry into a Comprehensive System of Social Security.)
That 2002 report concluded: “National health insurance is not an option that emerges overnight as an alternative to social health insurance. Instead, it becomes feasible within market economies where formal employment levels are high. Prior to this, mixed systems are inevitable.”
One indication of how committed government was to such a mixed system with an expanded role for medical schemes in the early and mid-2000s, is the fact that the legislative framework to enable the expansion of medical scheme coverage was incorporated into the 2008 Medical Schemes Amendment Bill. That bill did not go as far as making scheme membership mandatory, but a mandatory system was clearly a next step on the reform agenda, as outlined in the very wide-ranging 2002 Taylor report on social security in South Africa. But presumably because of the NHI proposals, the 2008 amendments were allowed to lapse – and the scaffolding for a progressive expansion of medical scheme coverage collapsed.
There have since been several committees of inquiry and technical processes that validated an ongoing role for medical schemes, of which the Competition Commission’s Health Market Inquiry (HMI), that ran for five years (2014 to 2019), was the most technically detailed, consultative and authoritative. The HMI report did not recommend that medical scheme membership be made mandatory for people who are employed, but it did recommend a continued role for medical schemes and suggested that the most viable path to NHI may well involve first fixing the regulation of medical schemes.
Van den Heever said South Africa needs to quickly return to the pre-2008 reform trajectory to help stabilise the health system, “before more harm is done”. Government needs to summon up the political will to address the systemic governance failures of the public health system, removing the “bad actors and provincial cabals” that were destroying the integrity of South Africa’s free public health services, he added.
Better regulation also needed
For a system of mandatory health insurance to work, medical schemes will have to be more effectively regulated. Here the HMI report found that government had dropped the ball. It attributed the private health market failure and rampant medical inflation directly to government neglecting to regulate the private healthcare industry.
Health actuarial consultant, Barry Childs, joint CEO of Insight Actuaries and Consultants, told Spotlight private healthcare sector reforms urged by the HMI were ignored, resulting in ongoing confusion, high costs, complicated products and waste, among other problems. “Our incomplete medical scheme regulation keeps costs up, (for example anti selection, Prescribed Minimum Benefits), with benefits out of reach of most. We still don’t have a proper framework for lower cost-lower benefit products for those who cannot afford medical schemes,” he said.
The HMI report recommended a framework that went “way beyond naïve approaches to price control”, said Van den Heever, and addressed the powerful incentive structures driving unproductive forms of competition. In addition, he said, the industry-wide pooling approaches (risk equalisation and social reinsurance) followed international best practice and fully addressed issues of pooling fragmentation.
In the five years since the publication of the Commission’s HMI report, none of its major recommendations have been implemented.
Jobs and taxes
One common thread running back to the 2002 report, is the idea that South Africa is not economically ready for NHI and that a mixed system, possibly with mandatory health insurance, is more compatible with the current realities of high unemployment and a relatively small tax base.
“The root cause of inequity and inequality is not just a new form of apartheid. The real reason is the catastrophic level of unemployment. Until we address that, we will not solve an entire range of inequities, including food security, housing, education, and healthcare,” said Friedland.
On joblessness, Childs said South Africa was on track with the rest of the world’s growth up to 2008 but thereafter flat lined for over a decade. “We have dramatically underperformed the rest of the world and our peer group of middle-income countries in long term economic growth.”
In South Africa, unemployment is at an extremely high 33.5%, while in 2002 it was at 26%.
“If an NHI was unaffordable in 2002, how much more so is it today?” Friedland asked. He said that in this context, strong partnership, collaboration, and co-operation between the public and private sector is needed to bridge the polarisation that has arisen.
Analysis commissioned by BUSA found that raising the extra R200bn the health department says it needs to fund NHI would entail unrealistic and unaffordable tax hikes. It would either increase personal income tax by 31%, push VAT from 15% to 21.5%, or require the collection of a payroll tax of R1 565 per month from everyone in formal employment.
Van den Heever said that while government has a discretion to increase tax rates to any level it chooses, it cannot control the resulting amount of funds raised. He said that once tax capacity is reached, a hard ceiling on government revenue results at any given level of economic growth. The only way to grow revenues thereafter is through economic growth, failing which, revenues stagnate beyond government control.
The “big idea”, he said, was that new taxes would fund the move of medical scheme members to the public sector, in the form of a single NHI Fund, such that both public sector and medical scheme populations were covered in the same system – with net gains in coverage for both.
However, contrary to what was “correctly understood” from 1994 to the 2002 Taylor Commission, “the maths for such an approach, just does not add up”, said Van den Heever.
“The fastest way to de-segment the system is to allocate all new government revenues arising from economic growth to the people who need it most. This is not what the NHI proposals envisage. They want to dilute the public spend by trying to cover higher income groups. It is dangerous magical thinking that allows government to avoid dealing with the complex problems of the health system. Government needs to get back to its day job and do the heavy lifting needed to get our health system working again.”
Government response
Spotlight shared an earlier draft of this article with the National Department of Health for comment. While the department did not comment directly on mandatory health insurance, Foster Mohale, the department’s Director of Communications, emphatically reiterated their support for NHI and the NHI Act that was signed into law in May.
“There is no better time than now to reform South Africa’s health system. It is time to do away with the apartheid type of health system, and to reconfigure it into one that ensures that every South African gets the health care that they need, when they need, where they need and without incurring financial hardship. With the enactment of the NHI Act, the time for piecemeal approaches that retain benefits for the few and leave the majority to the whims of the market is no more,” Mohale told Spotlight.
He said that many countries, including Japan and the United Kingdom, have implemented health system reforms directed at achieving universal health coverage during times of crisis and low economic growth. “Therefore, to say that South Africa must sit and wait for some oracle numbers to emerge before instituting NHI is merely to argue that we must consciously let those that are carving profits and dividends from the anomalies that characterise our health system to continue. This is an irresponsible position that the Department cannot adopt as health is a constitutionally enshrined right for every South African, not just a privileged few,” he said.
On the questions of taxes, Mohale said: “We will not delve into the projected tax implications because we believe this is a matter that squarely falls under the purview of the National Treasury and the Minister of Finance. Suffice to say at the right time, and after necessary deliberations through formal government structures and processes, any information relating to this will be communicated to the public for comments prior to finalisation.”
Note: The 2002 Tailor report titled ‘Transforming the present – Protecting the future’ is not readily available online. There is this PDF version (unfortunately not searchable and with poor accessibility). For ease of use, we have created a Word version of the document that you can access here. Health is discussed in chapter 8.
Lee Callakoppen, Principal Officer, Bonitas Medical Fund
Lee Callakoppen, Principal Officer of Bonitas Medical Fund, talks about the year ahead for Bonitas Medical Aid and its members.
The medical scheme industry has faced turbulent conditions over the past 12 months with the debate over NHI, economic pressures and reserves coming under pressure.
Despite this, our value creation model stood us in good stead with over R1.4 billion in reserves given back to members through benefit enhancements and low and deferred increases in 2022 and 2023.
The Fund, which has a proud heritage spanning over four decades, today (October 2) announced its pricing and benefits strategy for 2025. These announcements are traditionally seen as ‘price hikes’ but our strategy also considered benefit hikes in response to member needs.
Calculating the changes
The percentage increases are meticulously calculated by our actuaries, balancing the financial sustainability of the Scheme, while adhering to regulatory guidelines and requirements outlined by the Council for Medical (CMS). And, while Bonitas has seen a positive performance, we’ve had to take measures to prevent instability in our environment in arriving at our weighted increase of 10.2% as of January 1, 2025.
Over the past few years, we kept our contribution increases well below the industry average, while maintaining a healthy financial position while ensuring benefits are not eroded.
The contribution increases range from 8.7% to 14.9% per plan, with the latter impacting only 1% of members. The increases and new benefits have been submitted to the CMS and are subject to their approval.
The Bonitas Board and Executive’s input considered: Market trends, including international healthcare protocols, industry analysis, benchmarking reports and benefit utilisation patterns. Integral to this process was independently commissioned research across core stakeholder groups including brokers, HR representatives, corporates and local government.
Membership profile
Our members are from across a diverse range of backgrounds – with corporate membership spanning over 65 industries and profiles varying from students and singles to families, established professionals and those enjoying their golden years.
A quintet of awards
One way of measuring and gaining insights on whether a brand is getting it right, is through independent surveys and audits from industry bodies and consumers themselves. Recently Bonitas was announced the winner of the ‘Medical Aid Category’ in the Ask Afrika Orange Index® Awards for 2024/2025. It is the 4th category win over the past seven years. Principles such as trust, sustainability, reputation and care feature strongly in top customer need attributes.
It is also the 5th accolade for the Scheme this year, others include: Two BHF Titanium Awards for’ Best Integrated Report’ and ‘Best Operational Performance’, Top 500’s ‘Leader for medical aid’ and a gold in the Daily Sun Reader’s Choice Awards.
The life stage model
Our new model is designed to revitalise our approach based on industry, life stage and various psychographic and behavioural science elements. This is supported by a diverse product range, tailored wellness and screening benefits, access to healthcare services and optimised member communication to drive education and improve benefit access.
We continue to make health risk assessments and preventative care screenings a core enabler for managed healthcare initiatives. After all, early detection and speedy intervention is critical to enhancing our member’s quality of life. For example, roughly half of our population have high blood pressure. The latest international treatment protocols, recommend self-monitoring to help individuals manage their blood pressure more effectively. In keeping with this, a blood pressure monitor will be funded over a two-year cycle per family.
So, what’s new?
Integrated chronic care family practitioner network
There is a direct correlation between chronic diseases and mental health. For 2025, we have added a mental health component into our GP network, to facilitate early disease detection, diagnosis and multi-disciplinary care-coordination, through the high-quality network of doctors. In addition, we will provide more personalised engagement and support through the enhanced maternity programme, to treat antenatal and postnatal depression.
Hearing Loss Management (Audiology)
This includes free online hearing screening for all South Africans. Members on selected plans will receive hearing aids, audiology services and hearing aid acoustic services of the highest quality by using a network provider.
Weight Management Programme
Obesity or being overweight, substantially increases the risk of morbidity from at least fifteen conditions, including: Hypertension, coronary artery disease, diabetes, strokes, sleep apnoea and respiratory problems and cancer.
The programme, led by a biokineticist registered with Biokinetic Association of South Africa, provides a holistic approach to weight loss that includes access to a dietician and psychologist for support on exercise, nutrition and mental health.
Female Health Programme
We’re making a renewed commitment to the health and wellbeing of women and toddlers through the Mother and Child Care Benefit, including the Maternity Programme. Launched earlier this year in collaboration with CareWorks, the programme has an emphasis on preventative care and early detection of female-specific health issues, based on life stages.
Our enhanced Maternity Programme includes support for expecting mothers, including early identification and weekly engagement for high-risk pregnancies, post-childbirth care and associated mother mental health follow-up calls, given the prevalence of pre and postnatal depression.
It includes milestone reminders for children under three, immunisation reminders and online screenings for infant and toddler health and screening by an ophthalmologist for premature neonates, on all options except BonCap. This allows for early intervention and, where possible, prevents blindness. We’ve also opted to cover antenatal vitamins on all plans through savings or the Benefit Booster.
Bonitas Geriatric Care
This is a personalised range of screening, prevention and wellness benefits which can be performed in the comfort of their own homes and includes: Wellness screenings, vaccines for flu and pneumonia, age-appropriate screening for prostate, breast and cervical cancer, osteoarthritis screenings, coordination of care with a nominated GP, chronic care management and support and fall-risk assessments to allow seniors to live independently. All covered from Risk.
Diabetic retinopathy screenings
In partnership with PPN, our members can access cutting edge, AI driven diabetic retinopathy screenings. The screening also detects several other conditions that could affect the eyes.
Benefit Booster
The Benefit Booster remains the only benefit in the market which provides members with access to up to R5 000 as an additional benefit to use for out-of-hospital expenses, at no extra cost. For 2025, we’ve opted to bolster the Benefit Booster on seven plans, to offer even more value for money while providing access to additional benefits.
Despite the challenges in the healthcare industry, we continue to run a tight ship, staying on course to meet the diverse needs of our members with innovative benefits, a life stage model and a commitment to quality care.
Because we know health is not just a plan, it’s a lifelong journey.’
Breast cancer cells. Image by National Cancer Institute
Breast cancer is a significant health issue in South Africa, being the most common cancer among women, with a lifetime risk of 1 in 27. However, while breast cancer predominantly affects women, it is crucial to acknowledge that men can also develop the disease, and awareness needs to span genders. Early detection is key in improving outcomes, but the financial implications of treatment can be significant, as many medical aid schemes do not fully cover the extensive costs associated with treatment, including surgeries, chemotherapy, and follow-up care. Having gap cover in place can significantly ease the burden of out-of-pocket expenses, providing peace of mind for patients and their families.
Incidence on the rise
The latest statistics from the National Cancer Registry (NCR) indicate that breast cancer remains the most prevalent cancer among women in South Africa. According to the 2022 NCR report, breast cancer accounted for 20.4% of all cancers diagnosed in females, with a significant increase in incidence rates over the years. Although not very common, men also get breast cancer; approximately 1% of all breast cancer cases occur in men, and this number is also increasing.
Steve Kelly, a male breast cancer survivor, has been cancer-free for five years. “In December 2018, my partner spotted a lump in my right breast. It was painless, and I did not feel ill. It was diagnosed as stage 3 grade 3 breast cancer. I had surgery the following week, followed by six months of chemotherapy and six weeks of radiation therapy,” he explains.
While Kelly is one of the lucky ones, the reality is that many men who receive a diagnosis of breast cancer are not, because it is typically diagnosed late, which increases the mortality rate and also means that treatment has to be more aggressive. The increasing prevalence of breast cancer, along with the challenges of late-stage diagnoses, underscores the importance of early detection and education. Initiatives aimed at promoting regular screenings and self-examinations are vital for improving outcomes for all individuals affected by breast cancer in South Africa, including men.
Awareness is crucial
“Men do not scan and are generally poor at self-examination. More significantly, research shows that up to 33% of men would not seek medical attention if they found a painless lump in their breast. Because of embarrassment or ignorance, men would often present later with a more advanced breast cancer and a worse prognosis,” Kelly says.
Awareness campaigns need to evolve to become more inclusive. However, they also need to evolve to effectively target women, given the growing prevalence of breast cancer as well as the fact that it is increasingly affecting women at younger ages. Regular self-examination is a critical element in the early detection of breast cancers in both women and men, and having appropriate testing in place is essential.
Joanne Stroebel is another breast cancer survivor, and she credits her early diagnosis and successful treatment to her healthy lifestyle and her regular self-screenings. “Have your screenings done regularly and make sure to self-examine at least once a month. Once you have been diagnosed, involve your medical aid broker (or get one that knows the systems) and let them help you with the claims. The healthcare system can be very daunting when you have a new diagnosis, and extra stress is the last thing you need,” she recommends.
Easing the financial strain
Having medical aid is important in covering the cost of breast cancer treatment, but the reality is that many medical aid schemes do not fully fund treatments. There are many areas where you could potentially incur out-of-pocket expenses. Surgery is typically involved, which often comes with shortfalls on doctors’ accounts, such as surgeons and anaesthetists.
Prophylactic bilateral mastectomy (the preventative removal of both breasts) is generally not covered, and neither is reconstruction. Making use of a doctor who is not in a Designated Service Provider (DSP) network means additional shortfalls and co-payments. Medical aids also cover cancer in one of two ways: they either have an annual limit for cancer treatment, and once this is depleted you will only have access to Prescribed Minimum Benefits (PMBs); or they will cover you up to a certain Rand value, and once this is depleted you will incur a 20% co-payment on anything related to oncology treatment as well as the treatment itself.
Gap cover can go a long way toward alleviating the financial burden of breast cancer treatment. If your medical aid pays a lump sum, once this is depleted, then gap cover can assist with funding ongoing treatment, including in-hospital as well as outpatient treatment, pathology, and biological drugs, if these were covered by your medical aid. Gap cover can also help to pay the 20% co-payment, which can add up to significant sums, especially around biological drugs.
“Nearly a quarter (23.3%) of all Turnberry cancer claims are for breast cancer, and the highest individual claim we have seen is in excess of R80 000 resulting in a total treatment cost of more than R170 000. This is not an outlying number either – individual claims are frequently in the tens of thousands of Rands, and total treatment cost is usually over R100 000,” says Brian Harris, GM: Operations at Turnberry Management Risk Solutions.
Stroebel concludes, “Being a medical aid specialist, I was fortunate that I had the best cover available for cancer treatment. I never thought that I would need to try and raise funds for treatment, as I was confident that my medical aid and gap cover would cover any shortfalls, which was absolutely the case. I also had a dread disease policy that paid out, and being financially secure meant I never had unnecessary stress. Talk to your broker to make sure you have the best cover to suit your needs.”
An analysis of the top 20 gap claims (by Rand value) paid by Sirago Underwriting Managers during 2024 highlights an alarming reality for medical scheme members – the erosion of medical scheme benefits is resulting in members facing huge financial shortfalls for in-hospital treatment not covered by their medical scheme benefits.
Without gap cover in place, these 20 claims alone would see these medical scheme members having to collectively pay R3 million from their own pockets for in-hospital treatment. In many instances, the gap provider is paying more than the medical scheme – a complete misalignment if one considers the significant difference in premium/contribution between the two.
Gap cover is a supplementary insurance to a medical scheme benefit that covers the difference that arises from the rate that healthcare specialists charge for in-hospital procedures versus what a medical scheme pays.
A breakdown of Sirago’s 20 mega gap claims paid in 2024 follows:
Condition
Age group
Gap paid
% paid by Gap
Medical scheme paid
% paid by medical scheme
Circulatory system
50-65 years
R191 000
67%
R94 042
33%
Blood/Neoplasm
50-65 years
R191 000
39%
R304 515
61%
Circulatory system
66-75 years
R191 000
63%
R111 373
37%
Musculoskeletal
50-65 years
R175 709
68%
R82 553
32%
Musculoskeletal
66-75 years
R173 894
68%
R80 020
32%
Blood/Neoplasm
50-65 years
R163 198
71%
R66 347
29%
Circulatory system
66-75 years
R154 911
27%
R563 270
73%
Circulatory system
30-49 years
R152 360
64%
R85 288
36%
Musculoskeletal
50-65 years
R152 350
30%
R352 347
70%
Musculoskeletal
10-29 years
R142 660
47%
R176 705
53%
Circulatory system
66-75 years
R136 631
24%
R425 631
76%
Musculoskeletal
50-65 years
R129 396
36%
R229 985
64%
Circulatory system
66-75 years
R129 340
64%
R72 749
36%
Musculoskeletal
30-49 years
R126 771
82%
R27 573
18%
Circulatory system
30-49 years
R125 811
23%
R427 848
77%
Circulatory system
66-75 years
R125 479
43%
R289 378
57%
Neoplasm
66-75 years
R123 675
26%
R344 604
74%
Circulatory system
30-49 years
R123 001
22%
R415 237
78%
Musculoskeletal
76+ years
R121 276
51%
R120 230
49%
Musculoskeletal
50-65 years
R119 685
44%
R151 361
56%
Total:
R2 948 383
40%
R4 421 056
60%
Of these 20 gap claims, all shortfalls were in excess of R100 000, while three reached the maximum overall annual limit of R191 000 that a gap policy may cover, per member.
In almost half of the claims, gap cover paid more than the medical scheme paid. In one particular instance, gap cover paid R126 771 while the medical scheme paid just R27,573 – just 18% of the entire treatment bill was paid by the medical scheme.
Of the total healthcare cost across all 20 claims, gap covered 40% of the total cost, while medical schemes covered only 60% of the total costs for in-hospital treatment.
“These are massively concerning statistics and demonstrate just how financially devastating the shortfalls are for in-hospital treatment that medical schemes are not paying for. It is indicative of how medical scheme benefits are being eroded as schemes try to limit premium increases – members are getting less cover and lower benefit limits, despite the premium increases in their medical scheme benefit every year. Secondly, specialist fees and healthcare cost inflation is out of control and certainly not aligned with what schemes or consumers can afford. In the absence of any price regulation, and the absence of any competition as medical specialists are in short supply, things can only get worse. Providers are free to charge any rate they wish, often many more times the rates that medical schemes reimburse at,” explains Martin Rimmer, CEO of Sirago Underwriting Managers.
This continued acceleration of mega claims is putting the premium under pressure which inevitably will result in high premium increases every year. Sirago points to its gap claims trends over the last four years, which clearly demonstrate that being on a medical scheme option – even a comprehensive one – is no guarantee that your bills for in-hospital treatment will be paid for in full by your medical scheme. And the shortfalls are growing rapidly in financial quantum.
“Of these 20 mega claims alone, the shortfall paid by gap cover was between R120 000 to R191 000. These are huge numbers that very few people can afford to fork out from their savings, or go into debt for – which they would have to do if they did not have gap insurance in place. Just consider the implications for a 30-year old with a growing family to support and serious financial constraints, or a 70-year old having to fund such a cost from their retirement savings,” adds Rimmer.
Healthcare financial planning is critical
Medical scheme members will have until the end of November to make any changes to their medical scheme options which will take effect from 1 January 2025. Given the affordability constraints, many are looking to cut back but still want access to private healthcare for any hospitalisation or serious health crisis they may face in future. Sirago advises that you work with your professional healthcare financial advisor to do the sums, take you through a comparison of the various benefit options and then devise the best plan to ensure that your healthcare needs and access to private healthcare are covered, as best possible.
“If you’re on a medical scheme benefit, then adding gap cover to your healthcare plan is a non-negotiable if you want to protect yourself from shortfalls on in-hospital treatment and specialist charges which can be anything from a few thousand Rand, to over R190 000. If you’re on a medical scheme option that covers 100% or 200% of tariff charged, you are going to face shortfalls when you consider that many specialists charge upwards of 500% of the medical scheme tariff. You will be liable to pay those shortfalls from your own pocket if you do not have gap cover. Make sure to discuss this with your healthcare advisor.
“Always engage the advice and services of an accredited, skilled, and experienced healthcare broker/ advisor who will help you make informed decisions when needed most, as well as support you through the administration processes with getting your cover in place,” concludes Rimmer.
