News analysis

Source: South African Government @GovernmentZA
  • Major medical scheme Profmed on Monday took a tough line on funding Covid-19 vaccines for South Africa's uninsured – even as the first doses were due a big reception.
  • The government has at times hoped to tap medical aid reserves to pay for two extra vaccinations for each of their members who get the jab. And it has been counting on at least a 1:1 subsidy.
  • But stripping medical schemes of cash is unethical, no matter how you do it, said Profmed CEO Craig Comrie.
  • He also wants to see a conversation about medical scheme members getting "guaranteed access to vaccines sooner rather than later".
  • There has been much negotiation between medical schemes and the government, and to date the schemes have signalled a willingness to pay for a lot of vaccines.
  • Continuing bad news about coronavirus variants, however, seems to be making for a turn to the conservative.
  • For more stories go to www.BusinessInsider.co.za.


As the first doses of Covid-19 vaccines touched down at OR Tambo International airport in Johannesburg on Monday, a major medical scheme broke ranks on a funding plan that technocrats had considered all but a done deal.

Government budgets for vaccines have at times pencilled in a 1:2 subsidy, where every medical aid beneficiary would effectively pay for two more people to get vaccinated, on top of paying for their own shots. At the very least, the government indicated, it would expect a 1:1 ratio.

To date, medical schemes have largely stuck to criticism of the lack of details in that plan, and complained that without hard numbers they could not calculate the impact on their finances.

But on Monday, Promed CEO Craig Comrie simultaneously denounced the fundamental concept of a subsidy, and raised the issue of where medical scheme members will be in the queue.

"We haven’t yet agreed to this arrangement," said Comrie of subsidies, in a statement, "and will be reluctant to do so without a clear undertaking of how medical scheme members will get guaranteed access to vaccines sooner rather than later."

Government has insisted on procuring vaccines centrally, and its prioritisation plans take no notice of who is paying.

The management of schemes have, at least publicly, gone along with that approach on the basis that protecting the health system, and later achieving herd immunity, is critical to the wellbeing of the roughly nine million people who pay for medical insurance.

Schemes are also particularly well funded right now.

See also | Medical schemes spent so little in 2020 their extra reserves can cover SA’s entire vaccine bill

Private sector thinking seems to have been shifting – and negotiations seem to have become more fraught – as a steady beat of bad news about new variants of SARS-COV-2 continues.

Comrie referred to potential financial impact in his statement.

"We have advice that, with the rise of several Covid-19 variants, annual vaccines may be required, which will place significant strain on medical schemes in the future," he said. "Medical schemes will need to hold reserves to cater for these future uncertainties."

But he also has a problem with what he termed "mandatory donations" to a national vaccination drive, and said that is not a decision that a medical aid can make.

"The expectation that schemes’ reserves that belong to members should fund non-scheme members is in fact outside the legal and ethical decision-making powers that medical schemes can make."

It is not yet clear whether medical schemes will call extraordinary meetings, or otherwise poll their members, about vaccine subsidies. But the method proposed for the subsidy would make such a process moot in any event; the government would set a single exit price (SEP) for vaccines at a multiple of the actual cost, so there would be no legal way for anyone to buy a single dose of vaccine without paying the subsidy.

Meanwhile, Comrie argues, others will not be paying their fair share.

"There are many other businesses with reserves who have not been approached with the same magnitude of responsibility. The private business sector will benefit equally if the broader population can be vaccinated."

He has proposed a call for voluntary donations.

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