Medical schemes taken to court
Medical aid schemes are sexist towards pregnant women and discriminate against foreigners.
And the National Consumer Commission wants the discriminatory rules to be declared unconstitutional. The commission has turned to the Equality Court for help.
It is challenging four of the country’s top medical aids and their regulatory body, the Council for Medical Schemes. The commission has pointed to certain “discriminatory” clauses that technically exclude women who fall pregnant before they join the schemes from benefiting from the medical aid.
The respondents are the council; Medscheme, which is an administrator of Bonitas and Fedhealth; and individual medical schemes Momentum Health and Medshield. Bonitas and Fedhealth are also cited as respondents.
Speaking to The Sunday Independent this week, Oatlhotse Thupayatlase, the director of legal services at the commission, said that when the Council for Medical Schemes was asked about these clauses, it said they protected the schemes from “free riders” or people who took out medical aid schemes when they knew that they were pregnant and wanted to benefit.
The commission initially asked random medical aid schemes to submit their rules for investigation last June, to see if they complied with the Consumer Protection Act.
It found that each of the medical aid schemes in question had clauses stipulating a three-month general waiting period when someone joined and a “condition specified” waiting period of up to 12 months.
“The commission submitted to the schemes that the waiting period of three months and exclusion of 12 months for a condition that was there within three months of taking of the cover, refers to ‘pregnancy’. That being the case, it meant that the said clauses are discriminatory based on gender,” the commission contends in the court papers.
The clauses, said Thupayatlase, undermined the constitution and so the commission had asked the court to set them aside. It was contrary to public policy to enforce a time-constraint clause in the rules that “only affects a certain class of society and (does) it in a manner that is prejudicial to their rights”.
In contrast, he said, most diseases and conditions that could be classified fatal and involved expensive procedures were found to be included in the conditions for which the cover was extended with immediate effect and the only possible condition for which the exclusion could be applied was pregnancy.
Monwabisi Gantso, chief executive and registrar of the council, said in a letter in September that as much as it would co-operate with the commission, “the relationship between medical schemes and… members is not a traditional consumer/supplier relations”.
He said the board of trustees has a duty to protect members. “The rules of medical aid schemes will always be considered against this aim… and ensuring financial stability of the medical scheme.”
Medscheme argued on behalf of Fedhealth and Bonitas that the reason for the three-month waiting period and twelve months’ exclusion for a pre-existing condition was to protect the scheme from people who joined with the aim of undergoing an expensive procedure and then resigned thereafter.
In a letter that formed part of the commission’s court papers, Yolandi van Zweel, the general manager of legal governance risk compliance for Medscheme, argued that new members were assessed in terms of risks and that it was unfair for others to accord new member benefits not entitled to them. She said denial of resources to new members was fair, lawful, justified and in the interests of the broader membership.
If the scheme was forced to pay for members already ill, she argued, this would affect the reserve of the existing pool of funds.
Jonathan Phillips, the acting executive principle officer of Medshield, said this week that the scheme was merely applying its rules according to the law. It would defend the court action.
“Late joiner penalty fees are applied specifically to discourage anti-selective behaviour (when people only join the scheme to claim) as well as to protect the best interests of the overall membership.”
Damian McHugh, the head of marketing at Momentum Health, said it was still verifying if the papers had been served.
Cherith Sanger from Sonke Gender Justice Network said she agreed with the commission that the rule discriminated against women.
She said the constitution was clear that no person must be discriminated based on their sex and pregnancy.
But health economist Professor Alex van den Heever described the application as “completely absurd”.
“The ability to apply the waiting period is within the law. It was created for good reason.”
He said maternity claims were one of the largest costs in medical aid cover and that the costs of maternity were high, too.
“There is no rational basis for the application,” said Van den Heever.
“If women were allowed to claim for pregnancies before they joined the scheme, it would be a severe problem for medical aid schemes. It will result in a massive reduction in the scheme benefits and the costs of the schemes will increase.”
Meanwhile, Consumer Commissioner Mamodupi Mohlala-Mulaudzi said she had also received several complaints from foreigners who were penalised for not joining the medical scheme before the cut-off age of 36. This clause also applied to locals.
But Mohlala-Mulaudzi argued that some foreigners settled in the country only later in their adult life, and therefore medical schemes penalised them unfairly.
Van der Heever agreed, saying it was “potentially challengeable”.- Sunday Independent