South Africa: Keeping Healthcare Costs And Benefits To A "Prescribed" Minimum

Last Updated: 11 February 2011
Article by Justin Malherbe

The recent High Court application for an interdict by the Board of Healthcare Funders against the Council for Medical Schemes has received widespread media attention. Will the push by medical schemes to only pay for members' prescribed minimum benefits up to scheme rule limits be successful? This will depend on the court's interpretation of the regulations published under the Medical Schemes Act.

Since the scrapping of the National Health Reference Price List (RPL) in July 2010, the private healthcare sector has been left without guidance as to what can be regarded as suitable fees and charges for healthcare services. Amidst all this uncertainty, one thing has remained constant, namely, the legal requirements relating to prescribed minimum benefits under the Medical Schemes Act, 1998 regulations.

Medical schemes benefit options must pay "in full", without co-payment or the use of deductibles, the diagnosis, treatment and care costs of the prescribed minimum benefit conditions that are listed in an annexure to the regulations. These include a limited set of 270 medical conditions as well as 25 chronic conditions, such as hypertension, diabetes and asthma. Emergency medical conditions are also included. Regulation 8 requires medical schemes to pay the full cost of the diagnosis, treatment and care of these conditions. At least, that is one interpretation given to the wording by the Council for Medical Schemes (CMS).

The other interpretation is one which the Board of Healthcare Funders (BHF), acting on behalf of medical schemes, is seeking to place on the use of the words "in full". The BHF argues that medical schemes should only be statutorily compelled to pay for prescribed minimum benefits in full up to a limit stated in the individual scheme's rules. This, they say, is the only interpretation that will keep the managed healthcare industry sustainable in the long run. To view the issue otherwise would result in spiralling premium increases which would be damaging to the healthcare consumer.

The interpretation has become an issue because the CMS, as the regulatory body for medical schemes, has recently issued a circular stating that it will continue to enforce the requirements stipulated in the regulations in respect of the "payment in full" provisions of Regulation 8. The interpretation given by the CMS appeal board is that "payment in full" means payment as per the healthcare provider's invoice and not at a medical scheme rate subject to limitation in terms of scheme rules.

The players will have to wait a little longer for an answer as to which interpretation is correct in law. The court application by the BHF has been postponed until the new year.

The debate around the interpretation of the regulations raises interesting questions for consumers. Firstly, consumers have already noticed a dwindling of their healthcare benefits under most medical schemes. This is understandable when one has regard to the latest statistics supplied in the CMS Annual Report for 2009/10 which reveal that medical schemes in South Africa are under financial stress. According to the same report, total operating losses across all medical schemes amounted to R2.6 billion in 2009. Some schemes have been forced to dip into their reserves to pay claims. With the deterioration in the financial health of schemes, certain medical scheme options have been closed. Others have seen a rationing of benefits.

Besides requiring "payment in full" of prescribed minimum benefits, Regulation 8 also allows medical schemes to make rules which provide that the diagnosis, treatment and care costs of prescribed minimum benefit conditions will only be paid in full if those services are obtained from a designated service provider. If they are not, a co-payment by the member or deductible is allowed. One might think that this is a stipulation in favour of medical schemes which should be enough in the circumstances.

Interestingly, the reasons cited by both the BHF and CMS for their respective stances in the matter are not exactly worlds apart. The statement issued by the BHF addressing private sector cost escalations cites as its reason the fact that prescribed minimum benefits are oriented towards high-cost interventions. Without a cap on charges for these conditions, healthcare providers may charge what they like for treatment and procedures. The result of this, they say, is that members will have to fork out more and more for their medical scheme premiums. Their aim is to ensure long-term sustainability, together with affordability of healthcare.

The CMS claims that it is concerned with the sustainability of medical schemes but that it is also concerned with affordability. According to the CMS, prescribed minimum benefits aim to ensure that all medical scheme members have access to certain minimum health services regardless of the benefit option they are on, so as to provide people with continuous care to improve their health and well-being. Ultimately, it is hoped that this will make healthcare more affordable.

Generally, the primary rule of statutory interpretation is that if the meaning of the words is clear, it should be put into effect. Only where the plain language of the wording used is ambiguous, or if strictly applied would result in absurdity, would a court deviate from the literal meaning of the wording used in a legislative provision.

The court will need to consider whether the words "in full" are ambiguous in their context. The CMS asserts that it means the full cost of treatment. An argument could be made that no co-payment or deductible is allowed in respect of payment for prescribed minimum benefit conditions, which does not curtail schemes' rights to include benefit limits in their rules.

While there are numerous other considerations, not least of all the Bill of Rights, it seems that the present case may be one where a consideration of the social, economic and political context of Regulation 8 will assist the court to ultimately reach a decision on the interpretation so as to best promote spirit, purport and objects of the Constitution and the Bill of Rights.

When the court considers the pending application, one can only hope that it will reach a decision which does exactly that: striking a balance between economic and social considerations, so that both medical schemes and their members can continue to afford to pay for private healthcare in South Africa.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Mondaq Advice Centre (MACs)
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.