Something fishy

Saturday’s Personal Finance carried a story about the opposition to the plans to outlaw gap cover.  Apparently the C4MS was quite taken aback by the fact that medical schemes themselves don’t think this is a good idea.

In essence what the schemes and others are saying is that the CMS and Treasury’s reasoning is flawed (and lacks any supporting evidence) and that this is not the magic bullet to fix what ails the industry.  In a rare example of activism the Board of Healthcare Blunders comes right out and names the elephant in the room:

The Board of Healthcare Funders (BHF) has recommended to government that medical scheme members be entitled to continue to use supplementary products such as gap cover until there is sufficient reform of the private sector to ensure schemes are affordable and that the prescribed minimum benefits (PMBs) do not discriminate against certain members.

What BHF is trying to say is this: Start focusing on the real issues – focusing on GAP products, when there is a clear consumer need for these products is effectively rearranging the deck chairs on the Titanic, fiddling while Rome burns, starting a new property development on Atlantis, serving tea on the Hindenburg…

You get the idea.

The medical schemes industry is sitting in regulatory limbo and needs to be reformed. Not that we can expect anything to happen so long as Homer is otherwise occupied.

The issue of GAP cover is a red herring.  If they really have an urgent need to ban something they can take a closer look at hospital cash plans*, which are being sold as a substitute for medical scheme membership by some unscrupulous operators.

Am I the only one who is worried that this episode again points to a government and a regulator that is completely out of touch?

*These guys have a tiny fine print disclaimer at the bottom of the page stating that their product “is a Short-Term Insurance product – not a Medical Aid Scheme”.  In my opinion that doesn’t go nearly far enough.


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