Pre-funded healthcare in South Africa, as the principle vehicle for access to private healthcare, is inaccessible to the bulk of the population. This study unpacks some of the regulatory and supply side reasons that drive affordability challenges from the perspective of the low income consumer, with a view to stimulate debate on the necessary conditions for a more inclusive and accessible product market. It touches on the context and historical development of health finance and the forces shaping the industry today. It draws on a detailed health funding register that maps the features and cost structure of different lower-end medical scheme and health insurance options on the market to draw conclusions on the range of features and affordability of different options on the market.
The findings show that affordability of medical schemes is a key challenge for the low income market, largely due to regulatory constraints prescribed within the Medical Schemes Act. Insurance providers can provide more affordable products, but do not meet the social solidarity principles of the medical schemes environment. This raises important demarcation considerations on which a regulatory solution is, after a number of years of consideration, still forthcoming. Without a viable low-income option in the medical scheme sphere, there is an imperative to find a regulatory home for health insurance products that ‘mimic’ medical scheme benefits.