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Cape Town - The average consumer is unaware of the impact draft regulations by the National Treasury will have on the health insurance industry, according to Steph Bester, CEO of The Unlimited, a financial solutions and service provider in the insurance industry.
"These draft regulations can negatively impact those people who are currently making use of health insurance options," Bester told Fin24.
"That is why we have made a submission to Treasury not to pass these regulations prematurely by rushing the process."
The set of regulations currently submitted in draft form by the Treasury is an attempt to draw a clear line between the role of medical aidS and that of health insurance products in SA.
When the first draft regulations were submitted in 2012 for public submission more than 300 interested parties responded, according to Bester.
This led to changes being made and the second draft regulations that came out at the end of April. Comments on these closed at the end of July.
"The medical aid industry is highly regulated under the Council of Medical Schemes and is governed by a complicated set of regulations," explained Bester.
Health insurance products, however, are regulated under the Insurance Act.
In the medical aid sector the priciple of social solidarity governs this industry and the new set of regulations by the National Treasury wants to ensure it is not undermined by health insurance products.
According to this principle younger (healthier) members of a medical aid scheme "subsidise" older ones.
The challenge in South Africa, however, is that only 18% of South Africans are on medical aid, explained Bester.
"The majority cannot afford medical aid, although they would like to be on one," he said.
"Therefore, the health insurance industry caters for this population group so that they can at least have access to some form of health insurance and can thus afford to access private health care."
The problem he foresees with the current draft regulations, is that it would would outlaw some products currently offered in the health insurance industry.
"For example, there are health insurance products available today that allow people to see a doctor directly as a preventative measure, to get X-rays taken and to see a dentist. This will now be outlawed in terms of the new regulations," he said.
"If you remove people's choices it becomes a constitutional matter and that would not be fair."
Bester believes the passing of the regulations are premature.
"In medical aid schemes younger people are supposed to subsidiseS older members. But now medical aid schemes claim more and more younger people are rather choosing health insurance products and others are so-called 'buying down' on medical aid options and supplementing it with health insurance," said Bester.
"The draft regulations will put those who cannot afford medical aid at risk."
The unforseen result, in his view, will be that THE 90% of previously disadvantaged individuals who are not on medical aid will have no option but to turn to the already overburdened state healtcare system. They can, however, currently at least still access products in the health insurance industry.
"What would the drafters of these regulations say to single mother with two children who does not have time to go and sit in the queue at a state hospital?" asked Bester.
"It is not that we are opposed to what Treasury is doing. We just believe businesses in SA can make a huge impact if the government creates the environment where business can help to find a way forward that works."
- Fin24
"These draft regulations can negatively impact those people who are currently making use of health insurance options," Bester told Fin24.
"That is why we have made a submission to Treasury not to pass these regulations prematurely by rushing the process."
The set of regulations currently submitted in draft form by the Treasury is an attempt to draw a clear line between the role of medical aidS and that of health insurance products in SA.
When the first draft regulations were submitted in 2012 for public submission more than 300 interested parties responded, according to Bester.
This led to changes being made and the second draft regulations that came out at the end of April. Comments on these closed at the end of July.
"The medical aid industry is highly regulated under the Council of Medical Schemes and is governed by a complicated set of regulations," explained Bester.
Health insurance products, however, are regulated under the Insurance Act.
In the medical aid sector the priciple of social solidarity governs this industry and the new set of regulations by the National Treasury wants to ensure it is not undermined by health insurance products.
According to this principle younger (healthier) members of a medical aid scheme "subsidise" older ones.
The challenge in South Africa, however, is that only 18% of South Africans are on medical aid, explained Bester.
"The majority cannot afford medical aid, although they would like to be on one," he said.
"Therefore, the health insurance industry caters for this population group so that they can at least have access to some form of health insurance and can thus afford to access private health care."
The problem he foresees with the current draft regulations, is that it would would outlaw some products currently offered in the health insurance industry.
"For example, there are health insurance products available today that allow people to see a doctor directly as a preventative measure, to get X-rays taken and to see a dentist. This will now be outlawed in terms of the new regulations," he said.
"If you remove people's choices it becomes a constitutional matter and that would not be fair."
Bester believes the passing of the regulations are premature.
"In medical aid schemes younger people are supposed to subsidiseS older members. But now medical aid schemes claim more and more younger people are rather choosing health insurance products and others are so-called 'buying down' on medical aid options and supplementing it with health insurance," said Bester.
"The draft regulations will put those who cannot afford medical aid at risk."
The unforseen result, in his view, will be that THE 90% of previously disadvantaged individuals who are not on medical aid will have no option but to turn to the already overburdened state healtcare system. They can, however, currently at least still access products in the health insurance industry.
"What would the drafters of these regulations say to single mother with two children who does not have time to go and sit in the queue at a state hospital?" asked Bester.
"It is not that we are opposed to what Treasury is doing. We just believe businesses in SA can make a huge impact if the government creates the environment where business can help to find a way forward that works."
- Fin24
