When Changing Medical Schemes – Take Note!
So you’ve heard of a medical scheme that you want to join. But mayber you’re nervous about changing medical schemes in case of waiting periods, penalties or even no cover. What restrictions can a medical scheme apply?
Alexander Forbes Health Branch Head Tracy Janssens discusses the pros and cons about changing medical schemes. And she gives advice about all you need to know.
“Firstly, according to the Medical Schemes Act, no medical scheme can deny any applicant medical scheme cover. This is called open enrolment. The only thing medical schemes can do is apply certain restrictions to your membership.
There are only three restrictions a medical scheme may place on an applicant when applying for cover which are:
- A three month general waiting period. This means that you pay contributions but receive no benefits for a period of 3 calendar months
- A twelve month condition specific waiting period. This means that you are not covered for a specified pre-existing condition for a period of 12 calendar months. However, you are covered for other medical expenses not related to that condition
- Late joiner penalties. This applies to applicants over the age of 35 who have not had previous medical cover
But if you already have membership with a medical scheme, can a new medical scheme still place the restrictions? That really depends on the length of time you’ve had membership, the type of scheme you are leaving and the break between the two memberships. Let’s take a look at what schemes may apply and when.
Changing Medical Schemes – Waiting Period
If you have belonged to a medical scheme for longer than 2 years uninterrupted and have a break in cover of less than 90 days between the two medical schemes, the new medical scheme may only place a 3 month general waiting period. During the 3 month waiting period, the new scheme must cover you for prescribed minimum benefits.
Tracy Jannssens, Alexander Forbes
This is a list of 27 chronic conditions, 270 diagnoses and treatments and all emergencies. It is however important to note that the scheme is only obliged to cover these prescribed minimum benefits at a designated service provider (DSP) meaning they may prescribe which doctor, hospital or pharmacy you may use at this time. This may be the state. So it is important to check who the scheme uses as a DSP before accepting a 3 month general waiting period.
Changing Medical Schemes – 12 Month Wait
If you have belonged to a medical scheme for less than 2 years uninterrupted and have a break in cover of less than 90 days between the two medical schemes, the new medical scheme may only place a 12 month condition specific waiting period. Once again, the scheme must cover you for the prescribed minimum benefits.
If you have had a break in cover of more than 90 days between the two medical schemes, or if you have not had previous cover, the new medical scheme may place both the 3 month general waiting period and the 12 month condition specific waiting period and the prescribed minimum benefits do not have to be covered.
Changing Medical Schemes – Later Joiner Penalty
Late joiner penalties can always apply to applicants older than 35. Basically, this is a loading on the contribution of between 5% and 75%, depending on the number of years that you have not had medical scheme cover.
For example, if you are 45 years old, and you have been on a medical scheme for 2 years, they will work out that you have not had 8 years cover since age 35 and this will determine a 25% penalty on top of your standard contribution.
The more number of years you have not had cover, the higher the penalty. The penalty does not fall away after a certain period of time. It is therefore very important to acquire cover before age 35.
A scheme may not place any restrictions on your membership if you are already on the medical scheme (with no restrictions) and just switch between options or plans within the medical scheme. This is generally allowed once a year for most schemes, effective on 1 January of each year.
Changing Medical Schemes – Not All Medical Schemes Have the Same Restrictions
All restrictions are placed at the discretion of the medical scheme to which you are applying, so they may not place any of them, or they may place all of the restrictions that they are allowed to. This will generally depend on your age and pre existing medical conditions. Generally, if you are young and healthy, you should be able to switch medical schemes with no restrictions. However, if you have pre-existing conditions or are older than 40, the scheme will most likely place all the restrictions that they can.
So, if you’re planning to switch between plans, you’re safe. However, if you are going to change between medical schemes, stick to these quick guidelines:
- Apply for membership within 90 days of your last cover
- Obtain an acceptance from the new scheme with an explanation of the restrictions before cancelling your previous cover
- Make sure you understand what your rights are during the waiting period and which providers the new scheme uses as their DSP’s
- Use an approved intermediary that specialises in healthcare to assist you along the way.”