The Health Policy Unit (HPU) is dedicated to promoting a sound economic and business-friendly policy approach to the provision and funding of health care. Private supply of competitive health-care services and the incremental extension of private funding is considered to be the most effective method of supplying high quality health care to the entire South African population.
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“Social solidarity’s” proposed band-aid
Author: Jasson UrbachDate: 19 September 2014

Comment on the second Draft Demarcation Regulations closed on 31 July. Were the outlandish proposals contained in the National Treasury’s first Draft Demarcation Regulations another case of government applying their classic “door-in-the-face technique”? Were they intended to lull the public into agreeing to the adoption of the “more reasonable” proposals contained in the second Draft?

The initial draft regulations proposed banning gap cover products and limiting hospital cash plans. This would have destroyed the private health insurance market and was met with staunch opposition. The second draft allows for their continued existence, but within specified parameters. These watered-down regulations still leave intact the dubious principles driving the perceived need for change.

The fundamental problem yet to be properly identified, let alone resolved, is the principle of so-called “social solidarity” contained in the Medical Schemes Act of 1998 (MSA). The demarcation regulations seek to draw a line in the sand between health insurance policies and the business of medical schemes. The National Treasury states, “[Health insurance products] must operate within a framework whereby they complement medical schemes and support the social solidarity principle embodied in medical schemes”.

The MSA of 1998 changed the regulations governing the operations of medical schemes and set in motion the determined process of crowding-out private medical schemes. Four changes that drastically increased the cost of providing medical scheme coverage were: open enrolment, “community rating”, statutory solvency ...

Cover Image - Paying for Intervention
Paying for Intervention!
How statutory intervention harms
South African health care
Jasson Urbach
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Cover Image - South Africa's Health Care under Threat
Johan Biermann examines the threat to health-care delivery posed by South Africa's health legislation and offers suggestions for an alternative health-care dispensation in which all patients, rich and poor would receive high-quality private care.
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