Discovery Health (Pty) Ltd may turn to litigation after the Final Board of Appeals of the Council for Medical Schemes (CMS) banned two of its medical insurance products, says Rapport. The appeals board ordered Discovery to cease its coverage of about 30 000 people on its Comprehensive Primary Care and Essential Primary Care products, as it did for Agility Insurance Administrators for similar products.

Rapport says the ruling against healthcare-specific role-players is based on demarcation regulations placing products conforming to the definition of a medical scheme under the CMS and insurance products under long and short-term insurance legislation.

Discovery’s products provide cheap coverage for primary healthcare and specific procedures, but do not cover all Prescribed Minimum Benefits as does a medical scheme. Discovery said it had already launched a new application to allow its two products, apparently under the Discovery group’s short-term insurance licence rather than the medical administrator.

Discovery says it will approach the courts if necessary as the ban ‘leaves a critical vacuum in the market’. These products are aimed at millions of South Africans who cannot afford medical scheme coverage, but do not want to rely exclusively on public healthcare. There is uncertainty about these products as the government has yet to provide a framework for ‘low-cost options’ for medical schemes that would have to be exempt from PMBs.

CMS head Sipho Kabane said the low-cost option framework would not be ready by March as previously planned.

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