The healthcare environment in South Africa is currently in a state of flux as the government and private sector lock horns on what each should provide in the way of medical services and products as well as the financing of those services and products.
The government’s National Health Insurance (NHI) scheme has been ratified by Parliament, although it is unlikely to be implemented in its current form. The healthcare industry will likely remain in limbo until there is a feasible way forward.
The NHI impasse has stalled progress on the introduction by medical schemes of low-cost options for people who cannot afford the high premiums of regular medical scheme cover. In the absence of low-cost medical scheme options, short-term insurers stepped in, providing health insurance to individuals and primary health insurance packages to employees as part of their employee benefits. However, the insurers are currently operating under exemptions from the so-called “demarcation regulations” introduced in 2017, which delineate the business of medical schemes with that of insurance companies.
How long insurers will continue to fill this large gap in the market is uncertain, particularly if medical schemes are given the green light to provide low-cost options or if some implementable form of NHI materialises.
In the meantime it is important to know the differences between what medical schemes and insurers offer.
Medical scheme cover
This is the most comprehensive medical cover you can buy, even if you are on a budget-level plan. Medical schemes fall under the Medical Schemes Act, which provides a high degree of consumer protection. The most important features of medical schemes are:
• An open scheme (one that is not restricted to a certain worker group) cannot refuse you membership, even if you are sick and/or old. However, the scheme can impose a waiting period (a fixed initial period of, for example, six months, during which it will not pay claims for non-emergency procedures) and higher premiums in the form of late-joiner penalties for people who have not had medical scheme cover previously or have let it lapse.
• The scheme must provide full cover for medical emergencies and a list of life-threatening conditions, known as the prescribed minimum benefits (PMBs), even on its lowest plans. If you choose a provider that is not part of a scheme’s designated provider network, you may have to fund any difference in costs from your own pocket.
• A medical scheme cannot arbitrarily cancel your membership if you are deemed high-risk. Only if you fail to pay your premiums may a scheme stop covering you.
Note that even if you are on a top-of-the-range plan, the cover your scheme provides may fall short, especially when it comes to specialists’ bills. Specialists may charge three or four times the rates set by the scheme for treatments and consultations.
Health insurance
This is insurance cover for hospitalisation, typically offering a fixed rate per day in hospital, and/or for primary healthcare expenses such as GP consultations, prescribed medication, basic dentistry and some optometry at designated service providers. It is a poor substitute for medical scheme cover for the following reasons:
• Unlike medical schemes, cover may be more expensive for an older person than a younger person, provided that all policyholders of the same age pay the same premium.
• Unlike medical schemes, insurers may refuse to cover you if you are already sick or if you are over a certain age. (This may not apply to primary healthcare plans under employee benefits, as the insurance covers the whole employee group.)
• If you do have cover and claim too often, insurers can cancel your cover. (Again, this may not apply to group packages.)
• It covers you per day in hospital or pays out a fixed amount per specified event. When it comes to operations and specialist treatments – if you want to be treated in a private and not a state hospital – the fixed amount you receive would typically fall far short of the amount required.
• A private hospital may decline admission on the basis of a hospital insurance plan, or you may need to pay a cash amount upfront.
SOURCES:
https://www.medicalschemes.co.za/consumer-assistance/schemevsinsurance
https://www.hippo.co.za/medical-aid-quote/medical-insurance-vs-medical-aid
https://smartaboutmoney.co.za/insurance/healthcare-cover/what-is-a-medical-scheme
https://smartaboutmoney.co.za/insurance/healthcare-cover/what-is-a-primary-healthcare-plan
