Medical aid schemes, medical insurance and the low-cost benefit option II – Where we need to go

Part 2 in this series will look at the work done on the reform of prescribed minimum benefits and its implications for National Health Insurance.
Medical aid schemes, medical insurance and the low-cost benefit option II – Where we need to go


In Part I we considered the reasoning put forward by the Council for Medical Schemes (“CMS”) for the December 2019 decision to discontinue certain offerings within Medical Schemes and Insurance industries on the grounds of bringing offerings in line with National Health Insurance.

The CMS, after experiencing protests as well as a flurry of objections, notified stakeholders that they would engage accordingly. However, the December 2019 decision has not yet been changed via an official circular.[i]

In this Part, we will look at the work done on the reform of prescribed minimum benefits (”PMB”) and its implications for National Health Insurance.

Prescribed Minimum Benefits Review

On 20 July 2018 the CMS Costing Committee for Prescribed Minimum Benefits Review (“Committee”) was addressed by Research and Monitoring (“R&M”) as “R&M does not have detailed data that the costing committee can use” and that the available data is not detailed enough.[ii] It was further noted that at present “there was a model that derived from average expenditure, but it was noted that this was not a costing model as such.

On 24 August 2018 the Committee was still waiting for the PMB Advisory Review Committee (“PMB Review Committee”) to give them the PMB Benefit Package for costing, although discussions around the costing of the benefit package will be ongoing. Primary Health Care still needs to be clarified and defined in terms of PMB Benefit Package.”[iii]

In November 2019 the CMS invited stakeholders to not only comment on draft Primary Health Care (“PHC”) services but to provide data for costing of the proposed services.[iv] Circular 79 sets out a brief history which necessitated the PMB Review Committee inviting stakeholders to submit data that would assist the Costing Committee with “valid current and projected costs of the proposed services”.[v]

In light of the President’s speech on 23 March 2020 in which he announced that as a consequence of the Covid-19 pandemic[vi] “the National Coronavirus Command Council has decided to enforce a nation-wide lockdown for 21 days with effect from midnight on Thursday 26 March”[vii], the PHC is in need of crucial additions. These additions would need to include integration with the Disaster Management Act 57 of 2002, an Act that has come to the fore since the Presidential address of 23 March 2020.

Circular 25[viii] states that “all cases of COVID 19 are regarded as Prescribed Minimum Benefits (PMB) condition, and should be funded in full”. However, the concern does exist due to the CMS’s determination that these benefits will only apply “for as long as the epidemic persists”.

Primary Health Care

The Primary Health Care Services draft document (“draft PHCS”)[ix] notes the views held by many stakeholders that “the current PMBs are not responsive enough” and by the National Department of Health (“DoH”) that “the current package does not prioritise primary health care (PHC) and does not address the needs of the country”.[x] This “failure” is significant as South Africa faces a quadruple burden of disease in the form of: a very high prevalence of HIV and AIDS with have a relation to TB; increased maternal and child morbidity and mortality; exploding prevalence of non-communicable diseases; and violence, injuries and trauma.[xi]

The above has a part to play in mental health as not only are 16.5% of persons afflicted by mental health conditions but 19% of persons receiving routine HIV follow-up care experience issues with mental health as well.[xii]

It is within this environment that the CMS has undertaken the mammoth task of adding content to PHC as it relates to the PMBs. The CMS notes that “PHC is a whole-of-society approach to health that aims to ensure the highest possible level of health and wellbeing” which it seeks to achieve through primary care and essential public health functions as the core of integrated health services; multi-sectoral policy and action; and empowered people and communities.[xiii]

The CMS notes that the proposed services that will achieve PHC consist of: preventative services, diagnostic services, treatment, rehabilitation services; and palliative services.[xiv] The CMS further notes that a primary health care team will be a multidisciplinary collection of numerous providers.[xv] In terms of preventative services the aim appears to be better quality of life and increased life expectancy.[xvi] The services range from maternal to geriatrics and contain some 100 interventions and services across the spectrum.[xvii]

Diagnostic services, which are to be used for a specific clinical indication and not as a routine procedure, will require requisition as per policy guidelines.[xviii] These services will include pathology and radiology services, with the former including some 204 service offerings and the latter 99.[xix]

Treatment is the application of medicines, surgery and therapy to cure or mitigate disease, condition or injury in accordance with the standard treatment guidelines.[xx] These guidelines include the use of medicines selected from an essential medicine list consisting of some 101 therapeutic classes.[xxi] Apart from the use of medicines there are several services that find diverse application in matters from pregnancy to mental health and oral health,[xxii] totalling some 398 associated interventions and services.[xxiii] There can be no treatment without devices and consumables and provision is made for some 64 categories.[xxiv]

Rehabilitation services are defined as “a set of measures that assist individuals, who experience or are likely to experience disability, to achieve and maintain optimum functioning in interaction with their environment”[xxv]. Rehabilitation is aimed at: prevention of the loss of function; slowing the rate of loss of function; improvement or restoration; and compensation for lost function, maintenance of current function.[xxvi] There are some 24 interventions and services that span from pre-and post-natal to late adulthood.[xxvii]

The final cluster of service offerings as noted by the draft PHCS are those referred to as palliative services which are defined as “an approach that aims to improve the quality of life of patients and families facing problems associated with life-threatening illness, through the prevention and relief of suffering by early identification and impeccable assessment, and treatment of pain and other problems including physical, psychosocial and spiritual”[xxviii]. There are several categories of services offered that range from palliative care assessment and advanced care planning to counselling and end-of-life care.[xxix]

As a result of the Covid-19 pandemic it is suggested that the above procedures, especially those relating to preventative and diagnostic procedures be amended to include testing for agents that may cause same or similar harms, as numerous voices have noted the likely increase of pandemics in the future.[xxx] This addition will hopefully be easily assimilated into the cost[xxxi] of PHC to the benefit of those in need. The CMS in line with its obligations has put forward recommendations to possibly assist affected beneficiaries.[xxxii]

The cost

Establishing the cost of PHC, and therefore the cost of PMBs, is a massive exercise. It requires completion of the following stages:

1. Conditions to be treated


2. Treatment protocols


3. Inputs for each treatment protocol


4. Cost of inputs for each treatment protocol


5. Annual need for each treatment


6. Aggregate cost of revised PMB package per person

Progress has been made with stages 1 and 2. The draft PHCS has comprehensively considered the content of PHC. The cost is still to be determined, in part based on the submissions made by stakeholders. The deadline for submissions regarding the draft PHCS was 14 February 2020 with all matters regarding costing to be submitted between 6 January 2020 and 6 February 2020.

As the government currently plans it, in the long run health care services will be divided into those provided by the NHI and not insurable by medical aid schemes, and those not provided by the NHI and insurable by medical aid schemes. The key policy decision will be the definition of the boundary between these two groups of health care services, and that definition will be depend on the relationship of costs and the resources available for financing the NHI. It is not clear that definition of PMBs for medical aid schemes will even be necessary in the long run. In the short run (i.e. before NHI is fully operational), a change to medical aid PMBs may be made.


Stakeholder engagement regarding the CMS’s views as expressed in Circulars 80 and 82 of 2019 and its call for cost information in relation to the draft PHCS should take PMB reform and NHI costing forward. There remains a mountain of work to be done and progress will be slow.

Chris Pieters
Legal Researcher

[i]Legalbrief 24 February 2020.

Health: CMS to meet stakeholders on low-cost benefits

The Council for Medical Schemes (CMS) will appoint two advisory committees to engage with stakeholders on a low-cost benefit option framework and insurance demarcation issues, it announced on Friday. According to Rapport, the announcement followed protests by about 300 people at the CMS offices in Centurion on Thursday and numerous appeals by insurers who object to the CMS decision in December that health insurance products will be banned after 31 March 2021. Kerry Hertzog, of the Healthcare Stakeholders Forum, which organised the protest, says a CMS legal adviser promised a meeting this week with CMS Registrar Sipho Kabane. Discovery Health chief executive Ryan Noach said they welcomed the decision, but the move doesn’t change anything as the CMS has not retracted its announcements of December. Alexander Forbes Health head Victor Crouser says in their meetings with Kabane last week, he insisted that the demarcation provisions were never meant to be permanent. Both Discovery and Alexander Forbes say health insurance products offer a way for as many as 500 000 households to access some private healthcare services and should be seen as an important building block for universal healthcare coverage. According to Friday’s announcements, stakeholders may nominate members of the committees and make suggestions for the terms of reference until Friday (28 February).

[ii]CMS Minutes of the meeting of the Costing Committee for the Prescribed Minimum Benefits Review between 09:00 and 12:00 on 20 July 2018 (“2018 Meeting 01”).

[iii]CMS Minutes of the meeting of the Costing Committee for the Prescribed Minimum Benefits Review between 09:00 and 13:30 on 24 August 2018 (“2018 Meeting 02”).

[iv]CMS Circular 79 of 2019: Invitation to comment on the draft PHC services and request for data to cost the services (“Circular 79”).

[v]Circular 79 p 2

[vi] Everything you need to know about pandemics

[vii] Statement by President Cyril Ramaphosa on escalation of measures to combat the Covid-19 epidemic, Union Buildings, Tshwane on 23 March 2020

[viii]Circular 25 of 2020: COVID-19 lockdown measures (“Circular 25”)

[ix]Housed Circular 79.

[x]Draft PHCS at page 5.

[xi]Draft PHCS at page 8.

[xii]Draft PHCS at page 9.

[xiii]Draft PHCS at pages 12-13.

[xiv]Draft PHCS at page 14.

[xv]Draft PHCS at page 14.

[xvi]Draft PHCS at page 14.

[xvii]Draft PHCS at pages 15-22.

[xviii]Draft PHCS at page 23.

[xix]Draft PHCS at pages 23-35.

[xx]Draft PHCS at page 35.

[xxi]Draft PHCS at pages 35-48.

[xxii]Draft PHCS at page 48.

[xxiii]Draft PHCS at pages 48-77.

[xxiv]Draft PHCS at pages 77-80.

[xxv]Draft PHCS at page 80.

[xxvi]Draft PHCS at page 80.

[xxvii]Draft PHCS at pages 81-90.

[xxviii]Draft PHCS at page 90.

[xxix]Draft PHCS at pages 91-93.

[xxx] Why our shrinking natural world is increasing the pace of global pandemics and

[xxxii] Circular 28 of 2020: COVID-19 Medical Schemes Industry Guidelines (“Circular 28”)