Demarcation Regulations For Medical cover
The Minister of Finance together with the Minister of Health published the final Demarcation Regulations for medical cover. These Regulations are the outcome of a lengthy process lasting some years between ministers as well as the Council for Medical Schemes and the Financial Services Board. Here we will look at the demarcation regulations for medical cover.
In December 2016, Pravin Gordhan, finance minister and Aaron Motsoaledi, the health minister, published the regulations under the long- and short-term Insurance Acts.
The Demarcation Regulations For Medical cover – Medical Aids need to be Protected
The regulations which will take effect from April, are to create a line which distinguishes the two. The demarcation between these medical aid products and health insurance.
It is felt that certain health insurance products are too similar to those of medical schemes. It can cause harm to the medical schemes environment because it attracts younger, healthier members away from medical schemes towards these products.
If this practice were to continue, it would amount to increasing costs for older, sicklier people relying on medical aids for their cover.
Health Insurance Polices no Substitute
When it comes to the marketing of these health insurance policies. They will impose regulations as to ensure that the public understands that the policy isn’t a substitute for a medical scheme.
Health insurance products are regulated by the long- and short-term Insurance Acts of 1998 while medical scheme products by the Medical Schemes Act of 1998.
A report from Business Day shows that three health-insurance products were receiving particular attention within the demarcation process. These were –
- Gap cover plans – these cover the gap between what private medical specialists charge and what medical schemes will pay
- Non-medical expense cover as a result of hospitalisation policies – pay out a stated benefit when hospitalised
- Primary healthcare insurance policies – limited medical services
Insurance companies got a 2-year transition period to phase out primary health care insurance policies.
These demarcation regulations were not a solution for ongoing market abuses in the health care sector.
Treasury has however said that these demarcation regulations will protect consumers by putting a stop on abuses currently in the market and that this was just a small step towards getting rid of the worst problems. The underlying problem is that health costs are simply out of control.
Insurance Products not what they Appear to Be
Sheoraj said if insurance products wanted to be on a par with medical schemes. They should do so as he described it – on a level playing field. Sheoraj added that such products targeted the young and poor – those who were unaware about their cover.
Consumers often mistake certain plans as a worthwhile alternative to expensive medical aids and don’t like their choice in the end. Previously called for certainty.
Medical Aids still have a Place
The Demarcation Regulations are important measures to preserve the viability of medical schemes.
Even though medical aids have plenty of flak. They are still an important means of alleviating some of the pressures found in the public health care system.
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