2018 Changes to Medical Aid Rules: Dramatic News for Medical Aid Members

Co-payments, late joiner fees and waiting periods are a few of the existing medical aid rules in the direct firing line of the Medical Schemes Amendment Bill.

If the bill is passed in its current form, consumers of medical aid in South Africa can breathe a collective sigh of relief. They'll no longer have to cover the payment gap, wait for up to a year for cover or pay extra for joining a scheme later in life.

Although this is dramatic news for medical aid members, actual implications of the proposed changes – in terms of the cost of medical aid and the continuing viability of schemes – are still being assessed by stakeholders.

Medical Schemes Amendment Bill: key proposals

The bill, presented by Dr Aaron Motsaledi and gazetted (41726) for public comment on 21 June 2018, is one of several pieces of legislation that will pave the way for the planned roll-out of National Health Insurance (NHI) in South Africa.

If the Minister of Health gets his way, it will mean radical changes as to how medical schemes pay for benefits. Let's take a look at the key proposals of the Medical Schemes Amendment Bill in its current form.

1. No co-payments

Medical aid members will no longer have to cover the so-called “payment gap”. Instead, schemes will be compelled to pay for procedures and treatments in full.

In his briefing to the press, the Minister identified the estimated R60 billion currently held in reserves by schemes as a viable full-payment funding pool.

2. Waiting periods and late joiner penalties abolished

Waiting periods and late joiner fees will not be imposed on new members. According to Dr Motsaledi, waiting for three, six or 12 months for benefits to kick in, and paying up to 75 percent more on premiums, are unfair policies that have negative health and cost implications for members.

3. Benefit options to be approved

Schemes will not be allowed to implement benefit options unilaterally. All medical aid plans will have to be pre-approved by the Registrar of the Council of Medical Schemes, who will determine whether the option has the members' best interests in mind.

4. PMBs make way preventative benefits

Prescribed Minimum Benefits (PMBs) - the set of 300 medical conditions currently covered by all medical schemes in full - will make way for Comprehensive Service Benefits. These benefits will cover the costs of preventative and primary healthcare, such as vaccinations, family planning and medical screening services.

5. Medical brokers: yes or no?

The minister wants medical brokers banned but, according to a report in e-Health News, the bill says no such thing. Instead, the amendment deals with the members' right to agree with the scheme administrator's allocation of a broker and the fee charged for the broker's services.

6. Income-based contributions

Medical scheme members are currently charged the same premiums for matching benefits, notwithstanding income. In line with what the NHI wants to achieve, the bill intends to introduce a cross-subsidisation model, where the rich subsidise the poor and the young help fund the healthcare costs of the elderly.

7. Savings to benefit members

Medical aid schemes are not for profit organisations. As such, any savings achieved by the mandatory use of designated service providers (DSPs) by members should be passed back in the form of reduced premiums. At present, savings are held by the schemes.

Quite how these amendments to the Medical Schemes Act are to be implemented and funded remains unclear. We'll be sure to keep you updated on any new developments affecting medical aid members in South Africa.

At IFC, we offer informed, objective advice about South African medical aid schemes, and can assist you in joining the scheme that best suits your needs and budget. Contact us for more information or to discuss your needs.