Discovery blasted for signing up members ‘illegally’ to cheap medical product
- Discovery Life has been dealt a blow in a case involving its Primary Care products, aimed at workers who can’t afford medical schemes, from current regulations.
- The judgment included a scathing attack on the company for “deliberately illegally” enrolling people to the schemes.
- Some 63,000 workers are now members of the products.
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Discovery has come under severe fire for continuing to sell an unregulated cheap medical product, even after it was not supposed to.
In a blow to the company, the Board of HealthCare Funders (a group of medical schemes) has won an appeal in a case that centres on Discovery's Primary Care products – which are aimed at workers who can’t afford medical schemes.
Linking up with Discovery, companies can offer these products to their staff. Primary Care membership offers some benefits like doctor visits and prescription medicine. But they’re not medical schemes - they don’t, for example, have prescribed minimum benefits, which are the cover for certain chronic conditions, medical emergencies, and other illnesses required from all SA medical schemes.
Discovery Life, which manages the Primary Care products, applied to the Council for Medical Schemes for the products to be exempted from medical scheme regulations.
The CMS granted that exemption in 2018, but the Board of HealthCare Funders (a group of medical scheme competitors) appealed against this decision last year.
The CMS appeals board has now ruled against Discovery, which lost the appeal, and was rebuked in a scathing judgment for signing up tens of thousands of new members in recent months while the case was still pending.
Almost 63,000 employees, working for 330 companies, are now members of its Primary Care schemes.
The appeals board – chaired by Judge Bernard Ngoepe, who is also SA’s Tax Ombudsman - found that Discovery “deliberately illegally enrolled” people to the schemes.
“(Throughout), even as their applications for exemption were refused, PrimeMed [which is part of Discovery] and Discovery Health kept on increasing the number of enrolees regardless,” the appeals board noted.
“(If) we were to uphold the appeal, we would need to be concerned about the enrolees and see how they should be assisted. But we are not inclined to reward such illegality by construing the dilemma of the enrolees as an exceptional circumstance in favour of (Discovery Life).”
The board ruled that Discovery can’t take on more members at least until 31 May next year, or earlier – if there are new regulations that will govern its scheme.
In a statement, Discovery said that its Primary Care products represented less than 0.5% of group revenue.
“The Discovery Primary Care products have grown strongly since their launch in 2014, meeting a clear need for affordable access to private primary healthcare services by members who would otherwise be unable to reliably access these services,” Hylton Kallner, Discovery South Africa CEO said in a statement. “The Board of Healthcare Funders’ action against the Council for Medical Schemes is unfortunate insofar as it will in all likelihood undermine access to much needed health cover for vulnerable people in the long term.
The article has been corrected to reflect that Discovery didn't lose the appeal, but that the Board of Healthcare Funders won an appeal against the company.
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