Image
Icon

Directory

IconAssociations and Institutes
IconBBBEE Consulting and Verification Agencies
IconConsumer Protection
IconCorporate Governance
IconCredit Bureaus
IconFinancial Planners
IconLife Insurance Companies
IconLife Insurance Products
IconOmbud
IconOnline Quotes
IconPublic Loss Adjustors
IconPublications
IconRe-insurance Companies
IconRegulatory Authorities
IconSocial Grants (Government)
IconWellness Programs
Advertise Here
  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 »

New Credit Life Insurance Regulations Bring Good News for Consumers

A new set of credit life insurance regulations that will protect consumers from abusive practices by credit providers came into effect this week. The regulations have been hailed as a positive step to prevent consumers ...
Read More »

  

A health cash plan can cover loss of income

            Lee Bromfield, CEO of FNB Life                     People ...
Read More »

  

FSB draws attention to correction of Fin 24 article on Regulatory Examination and Wealth Management Qualification Fraud

On 14 June 2017 the Financial Services Board (FSB) issued a press release regarding qualification and examination fraud that was discovered by the Financial Planning Institute of Southern Africa (FPI) which required ...
Read More »

  

Liberty’s results reflect lower earnings and improved cashflow for the first half of 2017

Normalised headline earnings for the six months to 30 June 2017 are lower than the prior period but show an improvement compared to the second half of 2016. Growth in sales and net customer cash inflows, are underpinned ...
Read More »

 

More News »

Image

Healthcare »

Image

Investment »

Image

Retirement »

Image

Short-term »

Advertise Here
Image
Advertise Here

From The Glossary »

Icon

Individual Life:

Coverage of a single life. Contrast with group life where many lives are covered.
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