For many South Africans, hospital cash plans and primary health care plans are an affordable way to insure against medical bills, if they cannot afford to be a member of a medical scheme.
The future of these plans is uncertain due to changes in legislation relating to “demarcation”.
These insurance policies are doing the business of a medical scheme as defined in the Medical Schemes Act (MSA), but are not adhering to the Act, for example, they are not meeting the prescribed minimum benefits or accounting methods required by the Act.
Changes to legislation on 1 April 2017 mean that these products will be subject to the MSA, however, an agreement was reached that certain products that meet specific requirements will be exempt from the MSA to allow for the development of low cost benefit options guidelines.
What this really means is that the government has acknowledged that the amount of Prescribed Minimum Benefits a scheme must cover has made medical schemes unaffordable for many South Africans.
Until these have been revised and made less onerous, allowing medical schemes to provide lower cost options, the medical insurance products cannot be removed as many South Africans would be left without affordable medical cover.
The law allows insurers to provide these products on a year-by-year basis.
Salary-based medical scheme options
Some medical schemes offer entry-level cover for low-income earners, based on salary bands.
For example, an individual earning less than R6 300 per month can receive hospital cover, chronic cover and day-to-day cover on the Momentum Ingwe network plan for R759 per month for a main member.
A spouse would pay an additional R759 per month and a child R347.
According to the GTC Medical Aid Survey 2017, the top three rated schemes for entry-level plans include Makoti Primary, Momentum Ingwe and Discovery KeyCare Access.
These are aimed at young first-time workers and many allow members access to private hospitals as well as GPs, dentists and opticians, for example.
Most plans charge based on the salary earned so, although the benefits remain the same for all members, the higher-income earners are cross-subsidising low-income earners.
For individuals who only want a hospital plan, GTC Medical Aid Survey rated Discovery, Genesis and Momentum as their top options.
These include in-hospital cover, as well as out-of-hospital cover of chronic illness and prescribed minimum benefits, as set out by the Medical Schemes Act.