Health Insurance: Demarcation meets NHI
The many heated debates during the last few years regarding the control of health risk insurance, involving the Council for Medical Schemes, the FSB, SAIA and ASISA, remains to be resolved. And with the introduction of the NHI, the debate becomes even more complex.
After years of heated debate regarding the control over insuring health risk, the decision has finally been escalated to National Treasury for consultation and clarity on which healthcare risks may be undertaken by which financial services sector. The various financial sectors have begun a process of supplying data to National Treasury, so that clear regulations can be drafted into the Insurance Laws Amendment Act No 27 of 2008. To make matters even more complex, the National Health Insurance (NHI) concept has been introduced into the equation.
Amended legislation
The initial attempt at the Insurance Laws Amendment Act was rejected and opposed by the insurance industry as unworkable. A work group comprising of the FSB, ASISA, SAIA, CMS, Department of Health, the Treatment Action Campaign and the Aids Law Project has been formed to provide recommendations upon which the finalisation of the regulations will be based. It is expected that a working solution will then be inducted into the Insurance Laws Amendment Act.
Therefore, the existing Insurance Act stands, and accordingly health insurance, which conforms to the Act, may be written. This includes Gap cover, challenged by CMS via legal avenues and the Constitutional Court, stated benefit health policies, hospital cash plans, dread disease, medical travel cover and such similar type products.
New products
The most recent types of health cover to be introduced to the market are those offering cover for injuries incurred as a result of a motor vehicle accident. These have been introduced by insurers as a necessity, given that the government-run Road Accident Fund (RAF) Scheme is offering totally inadequate, and inefficient, benefits.
These products typically offer temporary and permanent disability cover, as well as accidental medical expenses, because the RAF restricts benefits for both these occurrences to R166 000 per annum and for "major injuries" only. Members of the public are well-advised to purchase private insurance to cover the "shortfalls".
NHI impact
How this will comply or fit in with NHI is yet to be discussed. There is no doubt that these types of products will, at some point, come into the demarcation debate and will have to be addressed in the Insurance Laws Amendment Act. It appears that as the demarcation issues are being addressed, the NHI is to be introduced. If and when this happens, the entire "playing field" for medical schemes, as well as for insurers, will change. Will medical aid schemes have to register as insurers? How will the Medical Schemes Act have to be changed? How will the Insurance Laws Amendment Act need to be changed, again?
Will insurers or medical aid schemes offer "top-up" cover to NHI, or will there only be one type of "financial institution" permitted to offer "top-up"? If an individual only wants "private health insurance", how will it look and will it be permitted?
The answers to these questions, for the present, are unknown. But what is absolutely certain is that they will affect all of us – buyers of health insurance or marketers of health insurance!
