This article was provided to us by Chartered Employee Benefits, an independent employee benefits consultancy, based in Johannesburg, South Africa.
What to look out for in the South African Healthcare System
Whether you are an experienced traveller, expatriate or travel as part of your work, you will always be faced with the uncertainty of what is around the corner when moving to another country. Legislation, infrastructure and institutions may vary significantly from your home country. Healthcare is by no means the exception and you may find yourself seeking answers.
South Africa’s Healthcare Environment
South Africa has two prominent healthcare systems, the public and private healthcare sectors.
Albeit that the public healthcare system is free and accessible to all, it is not enough for those seeking consistent, quality, medical treatment which is aligned with global standards and is cutting edge.
There is, however, a stark difference between the private and public medical sectors in terms of cost. An estimated 9 million residents in South Africa (out of a total estimated population of 60 million) participate willingly in the private medical insurance schemes, at an additional cost/premium. The private medical insurance industry currently consists of just under 20 open medical schemes. These schemes attempt to mitigate the costs of what is regarded as a high quality, yet expensive private healthcare system. Discovery Health’s top 10 individual member claims in 2017 amounted to R48 million or $ 3 200 000 (Rand to US Dollar exchange rate estimated at R15: $1, at August 2019).
Closed medical schemes also exist in the private sector and are available to employees who work for specific companies or industries.
The intricacies of the South African medical scheme environment
South African medical schemes are structured around complex rules and stipulated requirements that they must adhere to, and function within the realm of the Medical Schemes Act, some of which are listed below:
Open enrolment – Open enrolment is a principle set down in law which requires open medical schemes registered in South Africa to accept as a member or dependant, any and every person who wishes to join that medical scheme.
Community rating – this rule prevents a medical insurer from varying premiums. All members on a particular plan must pay equal contributions, however the Medical Schemes Act does make provision for the inclusion of a ‘Late Joiner Penalty’ which may be applicable to members over the age of 35 years.
Prescribed minimum benefits (PMBs) – there are 270 medical conditions which are covered in full, however, medical schemes are able to manage these costs somewhat. This includes emergencies. Emergency medical treatment is defined as, treatment required as a result of an onset of a sudden and unexpected condition which requires immediate treatment. If not immediately treated, one of three consequences would result: serious impairment to a bodily function, serious dysfunction of a body part or organ, or death.
Waiting periods – South African medical schemes like all insurance products need to protect themselves from ‘anti-selection’ to avoid people from joining medical schemes when they need healthcare and exiting the scheme when they don’t require medical care. There are three types of underwriting conditions which might be applicable, singularly or in combination such as:
• The 3- month general waiting period with access to PMB’s
• The 3-month general waiting period without access to PMB’s
• The 12 months condition specific waiting period
These waiting periods can be waived by medical schemes on condition that your employer has an exclusive and compulsory medical employer group.
Premium and benefit increases – It is the general practice for medical schemes to allow members to increase their benefits during a window period, generally, September to mid-December, to take effect in January the following year. Premiums, benefits and medical scheme plans across all medical schemes might be altered during this period as well.
What if I travel outside of South Africa?
The general rule is that medical schemes will allow insurance for a certain number of days travel outside of South Africa. This is applicable to medium/high benefit plans. Pre-existing conditions are excluded and so too are specific countries (additional insurance may be required i.e. travel insurance).
If you spend longer than 90 days outside of South Africa, alternative insurance would need to be considered.
Is a South African medical scheme sufficient?
What about co-payments?
Like most medical insurances, South African medical schemes have copayments and short falls.
Example: If a medical practitioner charges 500% above the medical aid rate, you are liable for the short fall. This may be the case for several medical practitioners at once e.g. for childbirth, a gynecologist, anesthetist, pediatrician and a mid-wife may be present or required. All of which may charge above medical scheme rates. You will be responsible for the shortfall.
Copayments may be applicable to several procedures such as MRI, CT & PET scans as well.
Gap cover insurance is available and may insure the shortfall between the medical scheme rate and the applicable fees. The annual limit applicable to these products is R157 000 per person and your insurance may cover the whole family. You may not purchase gap cover insurance if you do not belong to a medical scheme. These premiums are ‘risk-rated’ and may vary depending on age.
How do I compare medical schemes?
An independent ‘non-tied’ (licenced to advise on a specific medical scheme) consultant may compare several medical schemes, objectively.
Healthcare consultants earn a maximum of R94.77 plus vat per month, or 3% plus VAT in respect of the contributions of that member, or whichever is lesser (this is already included in the premiums).
Participating in a medical scheme will reduce the potential risks associated with the public healthcare system.
If you are employed in South Africa, ask your employer if they have a medical scheme group in place and whether they have favourable underwriting. If you are eligible to join such a group, you may pay premiums and claim immediately. Seek advice from an independent employee benefits/ healthcare consultant. Open a South African bank account as soon as possible to ensure that you may get insurance coverage on arrival.
Many medical aid schemes in South Africa have information about the various plans they offer, what they cover, and their pricing, readily available on their websites, so it is a good idea to compare this way, before signing up. Major medical aid providers include Discovery Health, Bonitas, Fedhealth, Momentum, Genesis, and Medshield.
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