Medical Insurance – South Africa

South African medical scheme members are quick to complain – you can ask any medical scheme with a call centre, the Council for Medical Schemes (CSM) as well as newspapers that run weekly columns where readers can complain. Medical scheme complaints make out a substantial number of these complaints. Many of these can be resolved long before it comes to the medical scheme or it reaches the Council for Medical Schemes (CMS). Yes, it can be resolved if members read their benefits (and know their health care needs) when joining the medical scheme…

Know your benefits BEFORE you need them!

In this article, we will not discuss health care policies that pay out an amount per day when the insured is hospitalised. The discussion will be confined to medical scheme membership as most South Africans know it and as  offered by different medical schemes, such as Discovery, Momentum, Medihelp, Bestmed, Bonitas, to name but a few. Another type of medical insurance, that provides cover for the ‘gap’ in the amount that your medical scheme pays the hospital/provider (especially specialists) and what the provider charges for a specific procedure, will also not be discussed in this article. This type of cover does not form part of standard medical scheme membership and, as such, is sold and costed separately.

Medical scheme membership can be complicated and costly and as belonging to a medical scheme means you have health insurance, it is best to involve an independent financial adviser that is FAIS accredited to give you advice when you purchase medical aid, not only to advise you on the various schemes available, but also to advise you on the right health care cover for your needs. Having health care insurance is not compulsory in South Africa, but having such insurance means you have access to health care services offered by and in South Africa’s private health care sector.

The information below is aimed at providing you with high-level information around a few of the things that you have bear in mind when choosing a medical scheme. It is no way intended as financial advice, nor is it intended to promote any one medical scheme over another. All medical schemes are not equal and not all schemes offer cover for all benefits on all benefit options. While money is the big separator (the more you are willing to pay the more benefits you will have access to), the art of choosing the correct medical scheme also rests on a number of other pillars…

Join when you are young & healthy

Medical scheme membership means you are covered in case you or one of your dependants needs a health care provider. Providers that are included (you are not necessarily limited to these) are the services of general practitioners, dentists and dental specialists, ambulance services, hospitals, medical specialists (access to more specialised services depend on your medical scheme’s benefit option).

Many medical schemes have realised the benefits (and savings to them) of having healthy members, and against this background many schemes that focus on a higher-end consumer have linked their medical scheme membership to a wellness programme that rewards members of all ages for making healthy choices and staying healthy. Examples of such loyalty and rewards programmes include Vitality (Discovery) and Multiply (Momentum).

Young and healthy members’ contributions are used to subsidise their higher claiming older counterparts who use chronic medication (i.e. monthly medication required to treat high blood pressure, high cholesterol, heart conditions), so it makes sense to join a medical scheme when you are young, healthy and you are not a high claimer (yet).

Late joiner penalties and waiting periods – what legislation stipulates

A ‘late joiner penalty’ applies if you join a medical scheme for the first time later in life, especially when you already need intervention and treatment for some chronic conditions and you are at higher risk of contracting a serious (and needing expensive treatment) illness.

Medical schemes are also allowed to apply waiting periods (for any pre-existing conditions you and/or your dependants might have - up to 12 months) if you haven’t been a member of a medical scheme for a period of three months or longer.  When changing medical schemes or upon joining a medical scheme for the first time, you have to provide proof of previous and current medical scheme membership.

Contributions – how calculated?

Medical scheme legislation also determines how a member’s contributions should be calculated to prevent any possible discrimination. The only two determinants that may be and are used to calculate a member’s medical scheme contributions are family size (the number of adults and child dependants) and income. The principal member of the scheme may include other members on the medical scheme, i.e. a partner, a child living with another family member, an elderly parent, etc.  In some instances, a medical scheme might request proof of financial dependency of such a member before they will approve membership.

Medical scheme composition: day-to-day and hospital cover explained

Most medical schemes typically provide cover for GP consultations, dental consultations, radiology, pathology, etc. as part of day-to-day benefits (typical examples of such cover include savings accounts or an overall limit specified in the case of a family). However, not all medical schemes offer cover for day-to-day benefits, while others might limit their members to providers that they have an agreement with and that form part of their network.

As part of  day-to-day cover, many medical schemes specify ‘sub-limits’ (as part of the overall limit that applies to all forms of day-to-day cover) for GP consultations, radiology (X-rays, MRI and CT scans), dental consultations, acute medication (used to treat once-off medical conditions), a separate benefit for chronic medication as well as specialist consultations. Some have a separate maternity benefit. Certain rules may apply to further manage the costs involved in some of the above, such a pre-authorisation (specialist consultations) and enrolment on a disease programme (chronic diseases).

Major medical expenses refer to the most expensive part of health care cover, treatment and intervention (all health care disciplines) while a member or a dependant is hospitalised. In most cases, members have to obtain pre-authorisation before they go to hospital (for a planned, scheduled operation or procedure). When a member or one of his or her dependants is admitted to hospital in the case of an emergency (i.e. a road accident), most medical schemes also have a cut-off time for the member or a next of kin calling for pre-authorisation to ensure that claims are paid. If pre-authorisation is required but not obtained, no claim in respect of such treatment will be paid by the scheme.

Many young and healthy South Africans choose an option that provides for hospital cover only. Many medical schemes also give an option to choose between hospitals that they have an agreement with (lower contribution). If you want to be able to choose any hospital, you might have this choice, but it will likely attract a higher contribution.

In an emergency, you may be taken to the ‘closest, most appropriate’ medical facility or hospital. Should this hospital not be on the list of hospitals approved by your medical scheme or benefit option, they have to stabilise you, after which you can be transferred to a hospital on your medical scheme’s list.

PMBs and SEP – what is this?

This part of medical scheme legislation pertains to Prescribed Minimum Benefits (PMBs), a list of around 26 conditions that all South African medical schemes have to provide cover for. SEP refers to Single Exit Price and this is the price that pharmacists are allowed to charge for their services and add to the price of medication when dispensing it to medical scheme members. Many medical schemes have also entered into agreements with pharmacies and pharmacy groups to pass on even more benefits to their members when they buy medication.

Competition Commission investigates private health care in South Africa

The South African Constitution (Section 27) stipulates that all South Africans must have equal access to quality health care services in both the public and private sectors and that the South African Government’s duty to protect and promote the right to health is also not limited to the public sector but also includes the private sector. Against this background, laws and policies, aimed at making health care more affordable for all South Africans, should be made.

It is against this background of health care as a human right, that South Africa’s Competition Commission began an investigation into the private health sector on 6 January 2014. Health care is not the same as an ordinary service rendered to South African consumers; it is a fundamental human right and often a matter of life and death. It follows from this that the level of quality health care provided as well as the availability of important information about health services are issues that should be more important than they currently are.

The main aim behind the inquiry or investigation is to achieve the right to access health care services for all South Africans. As such, the inquiry is an opportunity for the Commission to consider how prices are determined and what impact this and other factors have on South Africans’ access to health care services in the private sector.

The high cost of private health care also gave rise to this inquiry or investigation, which will see the Competition Commission using its significant powers to investigate competition in the South African private health care sector and then to determine what can be done to achieve accessible, affordable, high-quality and advanced private health care in South Africa. Competition Commission’s

Medical schemes, private hospitals, patients, patient groups and civil society organisations are among the interested and affected parties that are entitled to participate in this market inquiry.

From the above information about the Terms of Reference for the Competition Commission’s investigation into private health care in South Africa, it is clear that as far as access to quality health care for all South Africans is concerned, it will not be over until the proverbial fat lady sings…

It is worthwhile to note that South Africa is not the only country in which concerns about the cost of private health care and the impact it can have on access to quality health care for all gave rise to an investigation such as the one alluded to above by the Competition Commission. A similar inquiry in 2013 by the United Kingdom’s Competition Commission found that some of the private hospitals faced little competition. In its report on the findings, it said: “Private hospitals compete to attract those consultants who are likely to generate the most revenue for them”. More information on the Competition Commission’s enquiry can be found on the Commission’s dedicated.


Medical Insurance – SA Insurance Providers (9)