Primary healthcare to go, gap cover and hospital cash plans to stay

The National Treasury has introduced two new medical scheme regulations which will set a limit on the amount of gap cover and hospital cash-back policies you can claim, as well as the termination of all primary healthcare policies.

Heidi Kruger, Justmoney’s medical expert, said: “The purpose of these reforms is to bring about better alignment between insurance policies and medical schemes by making insurance products complementary to medical scheme products.  They also seek to avoid the undermining of medical schemes e.g. by discouraging members of medical schemes from buying down to lower cost options.”

The regulations, which were demarcated in terms of the Long-Term and Short-term Insurance Acts, will come into effect on 1 April 2017 for the new policies and from 1 January 2018 for existing policies.

The new pay-out limits for gap cover and hospital cash plans

The new regulations stipulate that hospital cash-back plans are limited to paying clients a maximum of R3000 per day, or a total lump sum of R20, 000 per year; and the gap cover policies will be limited to a pay-out of R150, 000 per annum, per client.

Say goodbye to primary healthcare insurance policies

The regulations have also stated the Council for Medical Schemes (CMS) must come up with low cost medical scheme products within two years to replace the current primary healthcare insurance products.

Kruger said: “This is a very constructive move as it will allow lower income individuals to enter into the private healthcare environment, increasing the number of people on medical schemes and therefore increasing the risk pool.”

“The challenge will be for the National Department of Health, the CMS and the medical schemes industry to review the Prescribed Minimum Benefits (PMBs) and to amend the current Medical Schemes Act in such a way as to enable this to occur in a sustainable way.” 

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