1. Competition Commission: Health Market Inquiry Public Hearings 2 March 2016

2. The Unlimited & HCP’s Competition Commission: Health Market Inquiry –Direct marketer of insurance and non-insurance products –Majority of customers have ‘hospital cash’ plans (HCP’s) –HCP’s: Cover contingent liabilities whilst hospitalised Benefits:  Not paid to service providers  Not determined by reference to medical expenses  Used for contingent liabilities and medical bills Private healthcare expenditure:  medical schemes = 81.2% (about R 98.1 billion)  insurance products and employers = 3.8% (R 4.6 billion)

3. Draft Demarcation Regulations Competition Commission: Health Market Inquiry –Health insurance products regarded as a threat to medical schemes: draw young, healthy people out of schemes leading to rising costs for older/sicker members. Cross-subsidisation key to improving affordability –HCP’s catered for → ‘Non-medical expense cover as a result of hospitalisation’ –Cover capped: R 3000 per day –Less than 20% of population has medical aid – health insurance or State facilities are the only options –HCP’s don’t pose a threat to medical schemes → scheme contributions unaffordable –Why cap benefits?

4. Right to Health Care Competition Commission: Health Market Inquiry –Right to health care services = a socio-economic right –State has obligation not to interfere unjustifiably with socio-economic rights –A law which leads to a decline in conditions to which SE rights pertain = infringement –Regulations will restrict ability for people who rely on insurance products to cover medical costs and contingent liabilities –No evidence that health insurance products affect viability of medical schemes. 2008 decision of SCA –Imposing limit on HCP’s does not address the issues associated with the affordability of medical schemes + LCBO’s on hold

5. Constitutional Rights contd. Competition Commission: Health Market Inquiry –By limiting / preventing insurers from offering health insurance products, only cover available may be medical aid – but costs exceed a R110 a month or so HCP and out of reach for most –Regulations indirectly discriminate against low-income individuals in contravention of section 9 – will have a disproportionate impact on such groups –Regulations not rationally connected to their purpose – will exclude mechanisms for low-income earners to provide for health care needs, increasing exposure to financial and health risks

6. Going Forward Competition Commission: Health Market Inquiry –Urge Treasury to await outcome of Inquiry before finalising Regulations –Inquiry may be moot at least insofar as health insurance policies affected by the Regulations is concerned –National Health Department’s ‘Patients Rights Charter’: every patient has “a right to: insurance”. –TCF Outcome 2: Products and services marketed and sold in the retail market are designed to meet the needs of identified customer groups and are targeted accordingly. Talks to: Responsible marketing of health insurance Products must be appropriate to target market – benefit caps?

7. Thank you