Prescribed minimum benefits

Its comes as no surprise that the Council for Medical Schemes (CMS) won the recent court case against the Board of Healthcare Funders around the issue of Prescribed Minimum Benefits (PMB’s). Genesis Healthcare Consultants was and continues to be in support of PMBs as members of medical schemes must be offered some form of protection in the event of life threatening diseases or illness. Too often members contribute to medical schemes for years without claiming based on the belief that the scheme will help them in times of need. This is clearly not the case as numerous schemes continuously operate with blatant disregard for the law.

It is rather contradictory that medical schemes in general can so easily quote percentage and statistics in respect to the increase in healthcare costs yet very few if any have actually stated the cost of PMB’s to their respective schemes. All the public is told is that should PMB’s be paid out in full, it will result in the demise of the industry. The Medical Schemes Act which came into effect in 1998, some 13 years ago, made provision for PMB’s to be covered in full. To date not one scheme has gone under as a result of paying PMB’s in full, however we have seen schemes liquidate, merge and consolidate as a result of accepting high risk members indiscriminately.

Comment from two of the largest schemes, Discovery and Bonitas has been somewhat opportunistic citing that providing cover for PMB’s does not pose a risk to their schemes due to their provider networks, statements that certainly pierce holes in the BHF argument and sets the scene for the future. No surprise, only 15 of the 75 medical schemes registered as members of the BHF supported their court action.

So what does this mean for members and the industry? Firstly, know you PMB conditions insofar as chronic medication and other surgical treatments are concerned. Your scheme must provide benefits in full. However, medical schemes are afforded protection as they can develop preferred provider networks, called designated service providers. This means that in their rules they can make provision for PMBs to be covered in full only if a designated service provider is used. Therefore, members need to know their PMB benefits and the designated service provider benefits and rules to ensure that their treatments are paid in full.

With regard to the industry we expect smaller schemes that are unable to develop these networks to continue to seek merge partners to gain critical mass. Failing to increase the risk pool will inevitably result in above average annual increases, reduced benefits and eventual demise.

Schemes like Discovery have developed innovative tools for 2012. By harnessing the benefits of technology, members can in 2012, ensure that they have no gaps in cover by using the “Full Cover” tools on the website. Members should seek the advice of a qualified independent healthcare consultant before choosing a medical scheme or when they require any hospital, chronic or major medical treatments.