The National Treasury has recently brought in two new Medical Aid scheme regulations set to shake up the industry. The regulations will see changes in gap cover related benefits as well as hospital cash-back policies. The regulations will came into effect from 1 April 2017 for new policy holders and in January 2018 for for existing policy holders.
The new regulations, which are written into the long-term and short-term insurance acts have been amended in order to place a clear difference between what we know as Medical Aid related products that are regulated by the Medical Schemes Act 1998, and health insurance related products regulated by the Long-term and Short-term Insurance Acts 1998, and are aimed at addressing high medical related expenses.
The first of the regulations state that limits on the amount you can claim on gap cover and cash-back policies will be introduced. To break it down, gap cover policy holders will only be paid out up to a maximum of R150 000 per year per client and hospital cash-back policy holders will only be given up to a maximum of R20 000 per year or R3 000 per day per client. It is important to note that these policies are not the same as Medical Aid schemes and these amount do not cover every day medical expenses. Previously no limit was placed on payouts. These changes have been implemented in order to try curb medical practitioners from, amongst others, charging exorbitant rates. Difficulties could arise though, if your time in hospital amounts to a higher rate than what has been stipulated.
The second regulation change prohibits insurance companies from providing primary health care policies any longer. The reason for this is that because they offer a very limited service with low fees, their contribution to the country's economic growth is insufficient to justify its continuation. According to BusinessTech, these policies have only brought in 1.4 million new main members since 2000. Insurance companies have been given a two year period in order to phase out these policies. Without them, the country has no entry level form of Health Insurance unless the new National Health Insurance (NHI) is given the go ahead.
If you’re on a Medical Aid plan chances are you won’t be affected by these changes, and only time will tell how they will affect those with gap cover policies, hospital cash-back policies and primary health care policies.