Govt to Separate Medical Aid from Medical Insurance
Government’s proposed legal amendment could spell the end of gap cover and hospital cash plans!
The government believes that what medical aids can do and what medical insurance can do are two different things.
Government says health insurance products are attempting to do what medical schemes are doing and this means they should be registering as medical schemes.
The government’s point of view is that there are some health insurance policies which undermine medical schemes and, if allowed to continue, they will threaten the commercial viability of medical schemes, negatively impacting on legitimate medical scheme members.
Limited Health Care for those who Can’t Afford Medical Aid?
With new draft regulations limiting the products that fill a gap for South Africans who can’t afford medical aid, health insurance providers want to oppose the new proposed regulations. They hold that it will limit the right to health care for those who can’t afford medical aid.
It is no secret that South Africa’s health care landscape is explosive, and this has resulted in proposed changes to the industry. This comes in the form of proposed amendments to Regulation 8 of the Medical Schemes Act. The objective of the proposed amendments to the Demarcation Act is to make clear- and to also separate the differences between a medical scheme and for-profit insurance companies.
There are a couple of areas addressed in the proposed amendments –
● Gap Cover
This is a key issue addressed in the proposed amendments to the Demarcation Act. Gap Cover is a product offered by insurance providers so as to cover the gap between specialist charges and the amount the medical scheme will pay. Going by what the proposed amendments say, gap cover will include those shortfall or gap costs for health care services and products. So if your medical scheme covers 80% of the cost of a treatment, the consumer, using gap cover, will be able to cover the balance of 20%.
Gap cover is going to be more regulated in the future. Medical schemes are currently closely regulated, while insurance providers are not. This makes the consumer vulnerable to what the insurance company can do. So now the regulations governing medical schemes will be in place for insurance providers offering gap cover, guaranteeing protection for consumers.
● Hospital Cash Plans
This is another key issue addressed in the proposed amendments to the Demarcation Act. These plans are also going to be far more regulated, offering more protection for a consumer’s medical needs. It is outrageous that most insurance providers only start paying out from a patient’s 3rd or 5th day in hospital. The most costly treatments occur in the first 3 days.
The proposed amendments state that insurance providers will now have to start paying from day 1 in hospital.
There is Good News Coming
The proposed amendments to the Demarcation Act are going to benefit the consumer while also offering some noteworthy opportunities to medical schemes and insurance providers as well. Insurance companies will now be able to offer cover for things such as malaria testing, domestic and international travel insurance, HIV/Aids as well as medical emergency evacuation transportation.
Medical Schemes and insurance providers will now also be able to collaborate with each other and provide consumers with plans and policies which will include benefits from both, while also ensuring more streamlined services.