Tag Archive for: South African Healthcare

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.

 

For information as to how Relocation Africa can help you with your Mobility, Immigration, Research, Remuneration, and Expat Tax needs, email marketing@relocationafrica.com, or call us on +27 21 763 4240.

Sources: [1], [2]. Image sources: Fas Khan [1], [2].

The Department of Health has set a target of 2026 to have a new national health system rolled out in South Africa, in many ways akin to the UK’s NHS, with the goal being equal access to healthcare, regardless of socio-economic status.

The first set of enabling legislation paving the way for universal healthcare in South Africa has been gazetted by Cabinet, Health Minister Aaron Motsoaledi announced on Thursday.

Motsoaledi presented two bills to the media on Thursday that would lead to massive changes in the way public health and medical aid coverage are handled in the country: the National Health Insurance (NHI) Bill and the Medical Aid Schemes Amendment Bill.

The minister said that the essence of the NHI is that the “rich will subsidise the poor, the young will subsidise the old, and the healthy must subsidise the sick”.

“Currently, it’s the opposite. At present, the poor subsidise the rich, and we will attempt to show that.”

Only 10% of South Africans could afford what was being charged in private healthcare, he said.

Citizens, civil society and the private sector have three months in which to comment on the new bills, which can be found HERE.

Single purchaser

The NHI Bill seeks to establish a fund – the National Health Insurance Fund – to act as a public entity governed by the Public Finance Management Act.

The fund will be a single public purchaser and financier of health services in the country, to ensure “equitable and fair distribution” and will be a mandatory pre-payment health services system.

It will purchase health care services, medicines, health goods and health-related products from certified, accredited and contracted service providers on behalf of the public.

It will “pool funds to provide access to quality health services for all South Africans based on their health needs and irrespective of their socio-economic status”, the minister explained.

The aim is for everyone to have the same access to the same standard of healthcare regardless of income, what people can afford or how frequently they need the services.

‘Terrible twins’ of the current system

Motsoaledi said there couldn’t be one set of rules for the rich and another for the poor as both groups “have the same health needs”.

He acknowledged that the move would require a massive reorganisation of the current health system, both public and private.

The National Development Plan described the exorbitant costs of private healthcare and the poor quality of public healthcare as the “terrible twins” of the health system.

Many have argued the country needs an overhaul of its health service first before changing the way it is funded, he said.

Fixing public healthcare, however, won’t be a single event, but a continuous, ongoing process, and shouldn’t be a “big stick” with which to beat back the move to national healthcare, he said.

“We are very much alive to the problems of poor quality in the public health system,” he said.

Comparison to Europe

South Africa currently spends a total of 8.7% of its GDP on both public and private health, he said.

The private sector spends 4.5% of GDP on health but only provides care to 16% of the population.

The public sector spends 4.2% of GDP on health but provides care to other 84% of the population.

Motsoaledi noted similarities in terms of spending when comparing SA to European countries, but not when it comes to the provision of healthcare. “It looks like chalk and cheese. The reason is the way the money is divided”, he said.

On top of that, South Africa is an outlier when it comes to voluntary spending on private health insurance.

South Africa spends 42.2% of total health spending on private healthcare, the highest proportion in the world. The US meanwhile spends 32%. The world average is 4.1%.

School health the ‘heartbeat’ of the new system

The NHI Bill will seek to make amendments to 12 other existing acts of Parliament in order to pave the way for an effective national fund.

For the purposes of the briefing, Motsoaledi confined himself to two acts: the National Health Act of 2003 and the Mental Health Act of 2002.

The amendment to the National Health Act will essentially give the minister’s office more direct capability in intervening in ailing provincial health departments, as it did in the North West earlier this year.

The same would apply for mental health services.

School health has been identified as the “heartbeat” of the new system under the NHI, with 12 million children in school currently.

After screening 3.5 million school children, the department found that eyesight, hearing, oral health and speech were physical barriers to learning.

The NHI would intervene in the matter, allowing for free glasses, hearing aids, oral hygienists and speech therapists. Pilot projects will be launched this year.

“We cannot wait for kids to arrive in clinics already sick. We need to know what is going on with them because they are the future.”

Co-payments to be abolished

Motsoaledi also announced the new Medical Aid Schemes Amendment Bill that will change how private medical aids operate in South Africa.

The minister said changes were necessary to pave the way for the NHI.

“The first amendment is to abolish what has become known as co-payments.”

Citizens have paid in the last financial year a sum of R29bn in co-payments from “their own pockets”.

“The patient should not be burdened with the need to pay anything,” Motsoaledi said.

“Of course there are people who say this amendment is callous and aimed at destroying the medical aid system. I assure you this has been well thought through.”

No late joining fees

He also took exception to medical aid schemes holding in reserves close to R60bn.

There is a statutory requirement that the schemes hold 25% of income in reserves to cater for emergencies.

“Our bone of contention is that R60bn is equivalent to 33% of reserves and is unnecessary accumulation.”

The bill will also abolish penalty fees for late joiners. “Under the NHI, there will be no penalty for late joining.”

In most retirement cases, a spouse cannot continue with the scheme until they themselves register as the principal member.

To see the gazetted bill, click here.

The transition is expected to take approximately 15 years in three phases. Phase two began in 2017 and will end in 2022. In theory, the system should finally be ready by 2026, Motsoaledi said.

 

Sources: News24 via AllAfrica [1]. Image sources: [1].

For information as to how Relocation Africa can help you with your Mobility, Immigration, Research, and Remuneration needs, email marketing@relocationafrica.com, or call us on +27 21 763 4240.