CMS to take action against actuary over comments about low-cost benefit options

The Council for Medical Schemes (CMS) says it will be taking action against Insight Actuaries & Consultants joint-chief executive Christoff Raath following his comments about low-cost benefit options (LCBOs) on 19 May.

The CMS also disputed Raath’s claim that up to 20 million low-income households could benefit if the regulator implemented a LCBO framework.

Raath told the Board of Healthcare Funders’ annual conference that the lack of regulatory reform meant millions of people from low-income households were paying out of pocket for private healthcare because they could not obtain affordable cover.

Read: ‘Low-cost benefit framework could give a third of South Africans access to basic private health care’

Raath is a member of the CMS’s Advisory Committee on LCBOs and chairs the benefit design, product and pricing workstream.

In a statement this week, CMS chief executive and registrar Dr Sipho Kabane said Raath’s presentation was riddled with “regrettable” conjectures.

“Participation in the LCBO Advisory Committee is voluntary, and members sign a charter and code of conduct, guiding documents that ensure the sanctity of the process.

“Mr Raath has had ample opportunity to address his misgivings about the process, at committee level and to CMS management, but has decided to air his misgivings in the form of a publicity stunt.

“The CMS has taken a dim view of this conduct and is currently examining this against the approved code of conduct and will be taking the appropriate action to preserve the integrity of the Advisory Committee and its work.”

Dr Kabane said the CMS remained resolute in ensuring that low-income earners have access to quality health care that is regulated effectively and complies with the Medical Schemes Act.

‘20 million is an overstatement’

The claim that up to 20 million low-income households could benefit from LCBO cover was “overstated”, Dr Kabane said. The committee’s market and affordability workstream estimated the figure at between 2.3 million and 4 million people.

The assertion that the removal of the medical tax credits and the requirement to comply with the prescribed minimum benefits (PMBs) to create a new market of between 10 and 20 million scheme members versus the current 8.9 million members was “too ghastly to contemplate”, according to Dr Kabane.

“To further suggest that this new market should be exempted from complying with certain provisions of the Act in perpetuity undermines the role of CMS as a regulator.”

He said the pillars of medical schemes were open enrolment, community rating and the PMBs, which guarantee that scheme members have access to a defined, fully funded, minimum package of health services, regardless of the benefit option they selected.

“It is this guaranteed legislated protection that Mr Raath wishes to take away from the potential 10 to 20 million members and offers nothing in its place.”

He said it was “untrue” that the PMBs were unwanted.

“Without a prescribed minimum package, millions of medical scheme members would be exposed to inferior cover in a country emerging from a major pandemic, an unmanageable burden of TB, HIV and Aids, and an increasing prevalence of non-communicable diseases.

“Mr Raath has not made a convincing case of how the overall health outcomes of the health sector will be best served by providing a cover that promises far less for low-income earners.”

Committee’s work is ‘far from complete’

Dr Kabane said that contrary to what Raath asserted, the work of the Advisory Committee “is by no means complete”.

Once the framework and the position paper have been finalised, they will be sent to CMS the Council and then to the Department of Health for approval.

The framework is expected to pronounce on the future of the exempted primary insurance products and respond to the need to provide a low-cost option by medical schemes. This framework will also spell out the exceptional circumstances that will be considered in formally allowing these products into the market under the auspices of the Medical Schemes Act.

The CMS’s consultation with stakeholders “should neither be vilified nor undermined, as it is in the quest to ensure that the final outputs enhance the quality of care for members and that no stakeholder is left behind”, Dr Kabane said.

“It would be amiss of the CMS to scupper those who contribute meaningfully to the process just to appease the loudest voice in the room.”

He said the Advisory Committee was next scheduled to meet in June.

Read: BHF criticises CMS for not updating PMBs and lack of movement on low-cost benefits

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