Much-awaited regulations under the Insurance Acts that demarcate health insurance from medical schemes will be released by the end of November, Reshma Sheoraj, a director of insurance in the financial sector policy unit at National Treasury, says.
The aim of the regulations is to ensure that insurance products do not undermine the subsidisation of the old and sick by young and healthy in medical schemes.
Despite the imminent regulations, some providers of gap cover health insurance, which pays the difference between what specialists charge for in-hospital procedures and what your medical scheme pays, have already announced their increases for next year.
Mike Settas, a director of gap-cover provider Xelus, says Xelus’s average premium increase of 11.8 percent does not take into account the possible impact of the regulations, because Xelus believes the regulations will affect only new products, while existing policies will be given a year in which to comply.
Treasury has released two drafts of the regulations over the past three-and-a-half years.
The first draft proposed a ban on gap cover and strict limits on the amounts that can be paid as benefits from hospital cash plans, which pay a set amount for each day you spend in hospital. The second draft proposed that insurers be allowed to offer gap cover, but with a benefit cap of R50 000. It also proposed that combination plans, which provide a hospital cash plan and primary healthcare cover, be banned.
Both drafts elicited much comment from stakeholders, including threats to challenge what was allegedly a denial of the constitutional right to access healthcare services.
Treasury, in conjunction with the Department of Health, has reworked the proposals.
In the meantime, the Council for Medical Schemes formulated a framework for a low-cost benefit option that would offer primary healthcare only, but this proposal was withdrawn following criticism from doctors.