ANC STATEMENT ON THE CRISIS IN THE MEDICAL AID INDUSTRY

The African National Congress (ANC) has noted with serious concern the continuing crisis in the medical aid industry, aggravated in part by the current economic recession (see report). The crisis points to:

• High costs of medical aid schemes for workers and employers, increasing at rates far exceeding the inflation rate. Premiums or contributions can cost a medical aid member between R12, 000 and R80, 000 per year, while the health benefits deriving from such high contributions are being cut or exhausted before the end of the year.
• A huge number of medical aid scheme members are under-insured, meaning that they have medical aid but face significant upfront payment expenses or limits on benefits. This undermines medical schemes' usefulness to members accessing or paying for needed health services.
• Significant amounts of money that workers and employers contribute to 120 medical schemes have nothing to do with health care. In 2007 - for example - more than R13-billion was spent on excessive administrative expenses by medical scheme companies. These costs included marketing, huge CEO salaries, brokers' fees, bonuses and profit taking.

The ANC shares the view that the medical aid industry has consistently failed to control the cost of health care and has been unable to address efficiencies and equity in the private sector.

While further regulation of the medical schemes may be necessary, this can only have an ameliorative effect. The key lasting solution lies - not only in addressing the needs of the 40 million uninsured - but also the millions who are currently insured or underinsured by the medical schemes.

It is precisely of the current problems associated with the medical schemes that the ANC has embarked on a policy process to ensure that South Africa re-organise the manner in which health care is financed, by introducing the National Health Insurance (NHI). Only through the NHI, will we overcome the present inequitable and fragmented two-tier health care system, by pooling health care funds into a single one. In this way, we will cover all South Africans with a comprehensive quality health service - free at the point of use.

Statement issued by Jessie Duarte, African National Congress national spokesperson, August 18 2009

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