There can be no disagreement that young South Africans face a profound crisis of unemployment, income insecurity and unequal access to healthcare. The fundamental question is should South Africa respond by creating another tier of limited private cover with very limited benefits, or build a health system based on health needs rather than income or employment status?
That distinction is fundamental.
In Dr Katlego Mothudi’s article, Low-Cost Benefit Options (LCBOs) are presented as a solution for millions of people excluded from medical scheme coverage. Yet, they remain contribution-based products for people with sufficient disposable income to purchase them. An unemployed young person with no income cannot buy an LCBO, nor can a precariously employed worker be able to sustain a monthly premium.
A product that extends limited cover to some people who can pay may expand a market, but it does not create universality. LCBOs seek primarily to solve a market access problem. Universal Health Coverage (UHC) seeks to solve a social problem by ensuring that access to healthcare is determined by need rather than ability to pay.
Proponents argue that LCBOs would enable medical schemes to attract younger and healthier members and strengthen their long-term sustainability. That may be a legitimate objective for a funding industry, but can be automatically equated with a health system equity objective.
The policy question cannot simply be how to replenish medical scheme risk pools with younger lives. It must be how to better pool resources and risks so that the healthy subsidise the sick, the young subsidise the old and the wealthy subsidise the poor. Invoking the youth unemployment crisis to motivate for LCBOs is particularly problematic. Young people’s exclusion from employment and healthcare should strengthen the case for universalism, not to justify the introduction of another differentiated insurance tier. There is also a contradiction in the pro-LCBO argument.
On the one hand, proponents invoke social solidarity and correctly identify weaknesses in the current medical scheme environment. On the other, they advocate voluntary, differentiated and limited products targeted at particular income groups. This risks further stratifying our health financing system.
We already have fragmented funding pools, fragmented purchasing arrangements and deeply unequal access to care. LCBOs risk reinforcing a hierarchy of healthcare entitlement, with comprehensive private cover for those who can afford it, and thinner packages for lower income workers. This is segmentation, not universalism.
LCBOs inevitably mean limited benefits. A person with limited primary healthcare cover does not cease to be at risk of cancer or severe mental illness. When necessary services are excluded, someone still carries the cost, either the household through out-of-pocket payments or the public system to which the patient must turn.
Need cannot be measured only by a monthly premium. The real test is whether a financing arrangement provides meaningful access to needed care and protects households from financial hardship.
The claim that LCBOs are necessary to advance prevention and primary healthcare is equally unconvincing. Primary healthcare is not an innovation of private financing. It is central to UHC and to South Africa’s health reform agenda. The real challenge is to, among other things, strengthen primary healthcare networks, strengthen prevention and pay providers in ways that reward quality and outcomes.
The argument that NHI will simply place additional pressure on taxpayers is also incorrect. South Africans already finance healthcare through taxation, medical scheme contributions, and direct out-of-pocket payments. If we are serious about the millions of young people excluded from adequate healthcare, our ambition must extend beyond selling them thinner cover as a means to achieve industry sustainability.
What young South Africans need is an actualised promise of UHC, and the standard against which every health financing reform is judged.
• Nkosi is chief director: Health Care Benefits and Provider Payment Design at the National Department of Health.
- There can be no disagreement that young South Africans face a profound crisis of unemployment, income insecurity and unequal access to healthcare.
- The fundamental question is should South Africa respond by creating another tier of limited private cover with very limited benefits, or build a health system based on health needs rather than income or employment status.
- That distinction is fundamental.
- In Dr Katlego Mothudi’s article, Low-Cost Benefit Options (LCBOs) are presented as a solution for millions of people excluded from medical scheme coverage.
- Yet, they remain contribution-based products for people with sufficient disposable income to purchase them.
