As a medical scheme member, you rely on your scheme to play by the rules. Here are some things which they cannot do.
The world of medical schemes in South Africa is a very different one now to what it was 25 years ago. There are strict rules and regulations governing the industry, and these are there to protect both the members and the financial sustainability of the scheme.
As members we are fortunate, as in many countries such as the US, before the advent of Obamacare, it was not illegal for schemes to cancel the membership of their most expensive clients. It is not legal to do that here.
There are separate rules and regulations in South Africa governing the world of medical schemes (schemes and hospital plans are governed by the Medical Schemes Act of 1998) and that of medical insurance (hospital cash-back plans and top-up cover are governed by the Financial Services Board).
If you are a scheme member, whether you have full medical cover or just a hospital plan, there are certain things your medical scheme is not allowed to do. Here’s more about ten of them:
1. Turn down your application. All applications for membership to a medical scheme have to be accepted if the scheme is an open one. The only two things a scheme can do is to impose a late joiner penalty (up to 75% of the contribution if you are elderly and have never belonged to a medical scheme), and to impose certain waiting periods. There is usually a three-month waiting period after you have joined, during which you cannot claim for certain benefits, and the scheme can impose a 12-month exclusion period on certain pre-existing conditions.
2. Refuse to admit a dependent of yours. A true dependent of yours cannot be refused membership. This would include a spouse or a life partner, children under the age of 21, a child of any age with a mental or physical disability, or any immediate family members who are financially dependent on you. This includes any parents who are dependent on you, but they can be required to pay full adult membership contributions.
3. Cancel your membership. A scheme may only cancel your membership if you fail to pay the contributions regularly and on time, if you fail to pay debts owing to the scheme (such as when they paid an account in full, for which you are liable for a portion), if you have been found guilty of trying to defraud the scheme in some way, or if you did not disclose information on prior medical conditions when applying for membership.
4. Force you to use network hospitals or doctors (designated service providers). A scheme’s network of doctors and hospitals are the best option if a member wants to avoid co-payments on medical bills. However, if you choose to use out-of-network services, the scheme could still pay the medical fund rate portion of the bill, but you will be liable for the rest.
5. Changing benefits or contributions in the middle of the year. This can only be done with the permission of the Medical Schemes Council following a request from the trustees. This is a rare occurrence. Generally, scheme benefits remain in place for the calendar year and contributions stay the same. A scheme can also not increase your contribution in the middle of the scheme calendar year. Most schemes put through contribution increases in the month of January.
6. Give pensioners a contribution discount. Pensioners may not pay lower premiums than other members. A pensioner’s contribution can be calculated on his/her last salary before retirement (in closed schemes). Most open schemes do not have differentiated contribution scales based on income. If they do, proof of lowered income must be provided (such as a tax return) before a pensioner can move down to a lower contribution level after retirement. Most schemes have an across-the-board contribution scale and contributions are not determined by income.
7. Load your contribution if you are a high claimer. Insurance companies can do this – and they often do. You wreck your car in an accident, and next year your premium goes up sharply. Medical schemes are prohibited from doing this by law. Your contribution is not dependent on your claims history. All members, whether they are high or low claimers, pay the same contributions, according to the contribution scale.
8. Not pay for Prescribed Minimum Benefits. Your scheme has to pay for treatment of a specified 270 conditions. There may be no restrictions or waiting periods or exclusions imposed on a member when it comes to the conditions on this list. The only time the scheme can expect you to make a co-payment for the treatment of any of these conditions, is if you choose to use a doctor or hospital that is not a designated service provider of the scheme.
9. Pay out medical savings accounts in cash. The only time a medical scheme can pay out the money in your medical savings account to you, is when you have resigned as a member from the scheme. Even so, you can still submit claims for four months after you have resigned your membership, so you will have to wait until that time has passed before the money is paid out to you.
10. Wait more than 30 days to pay out a claim. Technically, a scheme has to pay a claim within 30 days of receiving it. The Medical Schemes Council does monitor the time-frame of claims payments of the various schemes. The only exception to this is if there are items on the claim that are disputed. But if the claim is correct, there may be no delay.