Medical scheme myths and misconceptions

There is often confusion about how medical scheme cover and benefits work.

Here are the facts.

A common misconception is that medical schemes make profits

Medical schemes are not profit-making organisations. Laws governing medical schemes determine that surpluses registered by a scheme have to be added to the scheme’s reserves, which belong to the members. Medical schemes have trustees, not shareholders.

Can a medical scheme refuse an application for membership?

It depends on whether the scheme offers benefits to members in the open market (open medical schemes), or whether it is a scheme for members of a specific employer or industry (restricted medical schemes). Open medical schemes cannot refuse anyone membership, but LA Health, a restricted medical scheme for Local Government employees, cannot allow any person from the open market to join the Scheme.

If applicable, a scheme can impose late-joiner penalties, three-month general waiting periods or condition-specific waiting periods of no more than 12 months on new members.

Exclusion from treatment for a pre-existing condition is never permanent

The maximum waiting period for cover for a pre-existing medical condition is 12 months. However, it is fraud when a member does not disclose his pre-existing condition when he joins a scheme and that will have serious consequences.

Medical inflation occurs worldwide, not just in South Africa

Worldwide, high equipment and medicine costs, the spiralling costs of private healthcare, overtreatment in the private sector, and the increase in lifestyle-related diseases all contribute to high medical inflation.

100% cover does not necessarily mean the member pays nothing

Schemes normally provide cover at 100% of the medical scheme rate, which may be lower than the hospital or doctor’s rate. If a healthcare provider charges more than the medical scheme rate, the member will be responsible for the difference between 100% of the medical scheme rate and the amount the healthcare provider charges.

Certain treatment can be claimed for during a three-month waiting period

Emergency treatment needed after an accident, for example, will be covered.