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Low Cost Benefit Options exemption – Council for Medical Schemes update

Towards the end of 2019, the Council for Medical Schemes (CMS) published two circulars announcing its future plans for Low Cost Benefit Options (LCBO) and the Demarcation Exemption Framework. The timing and one-sidedness of this announcement was met with criticism from the industry. Following on from the circulars, the CMS embarked on various engagement sessions to unpack and deliberate on these decisions with interested parties.

On Friday, the CMS again dismissed the fact they want to prohibit low-cost insurance policies, such as hospital cash plans, and also the continuation of the development of low-cost medical scheme options. Various stakeholders officially objected to the plan in the media. According to Dr Ryan Noach, CEO of Discovery Health, a low-cost framework is important for universal healthcare as these affordable products ensures high quality primary healthcare services to more than 500,000 working South Africans.

The CMS also published Circular 12 of 2020 that shares that the sessions have led to the joint decision of establishing two stakeholder-based Advisory Committees. These will be tasked with:

Addressing the challenges faced by different stakeholders concerning their product offerings;
Developing a road map leading to end March 2021;
Serve as a platform for engagements on the draft LCBO framework that CMS has developed;
Provide the inputs on the LCBO framework before it is submitted by CMS for approval by the Minister of Health.

The terms of reference (ToR) of these advisory committees are now available for stakeholder comments. Inputs to these ToRs, as well as nominations (including CVs) — preferably through industry associations — are to be emailed to lcbo@medicalschemes.com by 28 February 2020.

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