Image
Icon

Directory

IconAppraisers and Valuers
IconAssociations and Institutes
IconBBBEE Consulting and Verification Agencies
IconConsumer Protection
IconCorporate Governance
IconCredit Bureaus
IconDefensive Driver Training
IconEmergency Medical Rescue
IconInsurance Brokers - Alphabetical Listing
IconInsurance Brokers by Type of Product or Service Needed
IconInsurance Companies
IconInsurance Consultants
IconLightning Damage & Surge Protection Specialists
IconOmbud
IconOnline Quotes and Cover
IconPremium Financing
IconPublic Loss Adjustors
IconPublications
IconRating Agencies
IconRegulatory Authorities
IconRisk Finance
IconRisk Management
IconRisk Surveyors
IconSalvage Operators
IconTelephone Quotes
IconVehicle Accident Management
IconVehicle and Household Risk Inspection Services
IconVehicle Tracking
IconWellness Programs
Image
  Subscribe To »

The impact of new gap cover and hospital cash plan laws

Published

2017

Tue

28

Feb

 

 

 

 

Sujeeth Bishoon, executive head at Acuideas

 

 

 

 

 

 

Johannesburg, Gauteng: After four years of debate, new regulations regarding gap cover and hospital cash plans will be enforced as of the 1st of April 2017. 

Government re-looked at the legislation as the lines between medical scheme products and health insurance became increasingly blurred, which is problematic as these offerings prescribe to different laws.

“Many consumers cannot afford comprehensive medical scheme plans,” explains Sujeeth Bishoon, executive head at Acuideas. “Hence, they opt for taking out a low-cost medical scheme plan and bridging their limited cover by taking out medical gap cover as well as a hospital cash plan. This kind of plan, in comparison to comprehensive medical scheme cover, is the more cost-effective option to ensure medical cover for the whole family.”

The new regulations are as follows:

  • Gap cover will be limited to a R150 000 payout per client per annum and will only apply to in-hospital visits.
  • Hospital cash plans will be limited to R3 000 per day or a R20 000 lump sum per year.
  • Primary healthcare policies will be outlawed.

As these regulations will be implemented from the 1st of April 2017, all new policies will have to comply with them, whereas existing policies will only do so from the 1st of January 2018.

“It is important for brokers and advisors to consider what the potential impact of these new regulations might be on the consumer,” Bishoon states.

Health Minister Aaron Motsoaledi believes that these medical scheme products give, healthcare practitioners, such as doctors, the opportunity to charge patients more instead of competing for patients either by offering better benefits and quality or by lowering their prices.

However, Bishoon says, “the legislation changes will create exposure for those consumers who cannot afford expensive comprehensive medical aid plans, or it may result in consumers incurring the additional costs to upgrade to comprehensive medical plans. This ultimately puts pressure on the disposable income of the consumer.”

In an attempt to lower the financial strain on consumers, the medical scheme industry and the Council for Medical Schemes are currently in discussions about a low-cost benefit option (LCBO). Although this option would fall under the Medical Scheme Act, amendments to the current legislation will have to be made as one stipulation states that 270 Prescribed Minimum Benefits should be available to all members at cost price, pushing up membership costs.

“The role brokers and advisors play will become more important as they scrutinise over both their client’s needs and the available medical insurance offerings in order to find the best possible insurance solution for their clients,” Bishoon concludes.

Introducing Acuideas, an innovative insurance offering from Indwe Intermediary Support Services, a subsidiary of Indwe Broker Holdings. With cutting-edge product development and sound business relationships, we offer cost-effective short-term solutions through a Broker Support Model and a Product Support Model.

For more about us visit: http://acuideas.co.za/media/ 

 
Source: Stratitude
 
« Back to previous page Print this page » |
 

Breaking News »

Addressing Risk with VUCA-Prime

    Dr David Hillson The Risk Doctor Partnership       Many risk practitioners have heard of VUCA as a way of describing an environment which gives rise to ...
Read More »

  

Arrive alive this weekend

Pretoria: Drivers, passengers and pedestrians have been urged to be vigilant and to prioritise road safety during this long weekend. South Africa celebrates Freedom Day and Workers' Day, making it a bumper ...
Read More »

  

Extending trade credit facilities in volatile and risky market conditions is not for the fainthearted

With South Africa’s economic position in a precarious state, particularly since the downgrade to junk status, many businesses may find themselves in a pickle over credit management. Chief executive of Debtsource, ...
Read More »

  

Road fatalities during the holiday period

Following the recent announcement by Transport Minister Joe Maswanganyi that there was a 51% increase in road fatalities from 156 road fatalities during the 2016 Easter holidays to 235 road fatalities during the ...
Read More »

 

More News »

Image

Healthcare »

Image

Investment »

Image

Life »

Image

Retirement »

Image
Image
Image
Image
Image
Image
Advertise Here

From The Glossary »

Icon

50% Method:

A method of calculating unearned premiums in short-term insurers. The method calculates UPR of 50% of premiums written for the year. It is based on the assumption that the average date of issue of all policies written during the financial year is the middle of the year. This method is generally used only by reinsurer’s where detailed information on inception dates of risk is not available.
More Definitions »

 
 
By using this website you agree to the Terms of Use.
Copyright © Stoker Risk & ICT (Pty) Ltd 2004 - 2017.
All Rights Reserved.
Icon

Advertise

  Icon

eZine

  Icon

Contact IG

Icon

Media Pack

  Icon

RSS Feeds