Issued by: Deparment of Health
(Joint statement by the Department of Health and the Council for Medical Schemes)
Date: 27 October 1999
The new Medical Schemes Act is intended to ensure that all South Africans are treated fairly in obtaining health insurance in the private sector.
The current medical schemes environment is characterised by a lack of general consumer awareness with regard to health products and their actual worth. In addition, consumers face immense difficulties in obtaining independent and sound advice on available health products. The Act should considerably alter the situation through greater regulation of intermediaries.
The new Act forbids any unfair discrimination, either directly or indirectly, against any person based on their age and health status. If any alternative product that discriminated against people on the basis of their age and health status were allowed to engage in the business of a medical scheme, it would significantly erode the consumer and scheme protections that are fundamental to the new legislation. The Department of Health and the Council for Medical Schemes will be taking a very direct and forthright role in protecting the public interest in this environment.
The business of a medical scheme involves undertaking liability, in return for a contribution to make provision for health services as defined in the Act. Any person or entity that does such business will be required to register in terms of this Act. In drafting the Act this was regarded as the only effective way of ensuring a level playing field and securing the overall environment. The Medical Schemes Act also takes precedence in cases where there is conflict with any legislation other than the Constitution. This is precisely because it is this Act that fundamentally defines private health financing policy.
The new Act provides ample scope for benefit design, especially where the focus is on alternative contracts with providers. The Department has firmly closed the door on products where the only form of innovation involves discrimination against people who need health care the most.
Innovation can no longer be simply about discriminating against the elderly and the sickly.
The new legislation requires a greater degree of transparency, and this should allow consumers and employers to judge whether they are receiving value for money. This includes the activities of brokers, who are required to provide consumers with "best advise" and to disclose their accreditation status and remuneration. In addition, brokers cannot accept any direct or indirect payments over the specified limit, including "incentives" from any source whatsoever.
However, consumers and employers will need to be vigilante and ensure that any product sold to them operates within the ambit of the legislation.
Consumers and employers who have any concerns about the manner they have been treated by any broker, scheme or administrator are urged to contact the Department and the Council at the above number or at the following e-mail: masobp@hltrsa2.pwv.gov.za
Contact: Patrick Masobe Phone: (012)3120958
Fax: (012)3237548
Department of Health
Private Bag X 828
Pretoria
SOUTH AFRICA
Phone: 312 0560
Fax: 325 7813/4