Image
Icon

Directory

IconActuaries
IconAssociations & Institutes
IconAuditors
IconBBBEE Consulting and Verification Agencies
IconBusiness Chambers
IconBusiness Process Management
IconBusiness Process Outsourcing
IconCall Centre Outsourcing & Sales
IconCompliance
IconConsumer Protection
IconCorporate Governance
IconCredit Bureaus
IconDebit Order Collection Facilities
IconEducation and Training
IconFAIS
IconHuman Resources
IconInformation Technology and Software Partners
IconLegal
IconLife Insurance Companies
IconLife Insurance Products
IconOmbud
IconOutbound Sales
IconPolicy Administration
IconPolicy Trading
IconPublications
IconRe-insurance Companies
IconRegulatory Authorities
IconSales and Sales Management
IconSocial Grants (Government)
IconSurveys and Research
IconTraining Courses & Workshops
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 »

The Insurance Crime Bureau facilitates bust of another insurance fraud murder syndicate

By The Insurance Crime Bureau     In another Murder for Money case in Pietermaritzburg, we are happy to advise we have seen some really meaning guilty verdicts & sentences. One ...
Read More »

  

Don’t ignore cultural notions, says Long-term Insurance Ombud

          Judge Ron McLaren Ombudsman for Long-Term Insurance                     Cape ...
Read More »

  

Large natural catastrophe losses in 2017 and current low prices likely to lead to improved pricing in non-life re/insurance

Major natural catastrophe events in 2017 and current low prices are expected to push pricing in non-life insurance and reinsurance higher Cyclical upswing in global economy set to continue in 2018 and 2019, supporting ...
Read More »

  

The underwriting disrupters – changing the face of the life insurance industry

By Francois Schaap, Managing Director, Guardrisk Life and Ryno Van den Berg, Managing Executive, Guardrisk: Volume   Over the last few years, the words “disruption” and “disrupters” ...
Read More »

 

More News »

Image

Healthcare »

Image

Investment »

Image

Retirement »

Image

Short-term »

Advertise Here
Image
Image
Image
Image
Advertise Here

From The Glossary »

Icon

Back Date:

A procedure whereby a policy is issued with a policy date prior to the date of execution of the policy. This may occur when an insured’s needs change and he or she exchanges an old policy for a new one with a date prior to exchange.
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