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By Staff Writers

The Council for Medical Schemes (CMS) may scarp smaller medical aids with less than 6, 000 principal members.

CMS has told Business Day that medical schemes with less than 6,000 principal members had been identified as potential targets for consolidation, as they failed to meet the requirements of the Medical Schemes Act.

While the Act says schemes must have 6,000 members to register, the CMS has, for the past 17 years, permitted schemes to operate below this threshold.

Consolidation of the industry was necessary because fragmented risk pools were expensive, and limited the scope for cross-subsidisation, CMS acting registrar Sipho Kabane told Business Day.

“It isn’t just about non-compliance [with the Act]. This is just the beginning. In National Health Insurance (NHI), we will have one risk pool: from 83 we will consolidate into one. We are going, through a consultative process, to come up with a clear mandate on how this will be [achieved],” he said in a telephone interview with the newspaper.

The move had been slammed by insurance and health experts.

However, Kabane said the decision to consolidate the industry was in line with the government’s White Paper on NHI, published in June.

For more read: Experts decry plan to consolidate small medical schemes

 

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