Protection extended to buyers of cut-rate medical plans
The Council for Medical Schemes will now entertain complaints about insurance policies that provide cover for primary healthcare services, a medical scheme conference heard this week.
More than 200,000 people, including many members of bargaining councils, use these policies as they are unable to afford the protection of medical scheme membership.
These policies and those that provide payouts covering actual hospital expenses can no longer be offered as insurance policies, following the release of regulations under legislation governing long- and short-term insurance. These clarify what is regarded as the business of medical scheme and what medical expenses insurers can cover.
Companies offering primary healthcare plans as well as hospital indemnity policies are expected to register these plans as medical schemes. They have been allowed to apply for a two-year exemption from this.
The council had granted 35 exemptions covering 117 primary healthcare plans and 87 policies that provide indemnity for hospital expenses, Paresh Prema, the general manager of benefits management at the Council for Medical Schemes, told the Board of Healthcare Funders conference this week.
Primary healthcare plans are low-cost plans that provide policyholders with access to family practitioners and cover the costs of acute medicines and sometimes basic dental and optometry benefits. They are often sold with hospital indemnity policies that give you limited cover for actual expenses if you are admitted to hospital — for example, after an accident.
Prema told the conference that now that these policies were within the Council for Medical Schemes' jurisdiction, it would have the ability to deal with many of the complaints that had previously been taken to the council but which until now it did not have the ability to process.
He said that when the so-called demarcation regulations under the long-term and short-term insurance acts were released it was envisaged that the Department of Health would do more research into the development of guidelines for a low-cost benefit option for medical schemes and this option would provide a way for primary healthcare plans to register as medical schemes.
Medical schemes are hampered in their ability to offer low-cost options because they are obliged to provide prescribed minimum benefits. The average cost to schemes of providing these benefits is now over R800 per life covered per month, the conference heard.
Draft guidelines issued previously by the council for a low-cost benefit option exempted them from providing expensive hospital benefits and focused on the primary health benefits that should be offered.
Research into a low-cost benefit option would now be undertaken as part of a review of the prescribed minimum benefits, Prema told the conference.
The demarcation regulations, which were promulgated in January, allow insurers to sell certain health insurance policies only. For example, as of April this year, new policies to cover the gap between what your medical scheme pays a doctor and what the doctor actually charges, are limited to offering R150,000 per insured life per year.
Insurers are also allowed to sell hospital cash plan policies, but such policies issued after April this year are limited to paying R3,000 per day you spend in hospital, or a lump sum of R20,000. These policies are regulated by the Financial Services Board and complaints about should be taken to the ombudsman for financial services providers.