New: hospital cover from short term insurers pay out primary health care
and hospital-related costs
Now more than ever your
needs powerful hospital cover
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Hospital Cover from Short Term Insurers
A health insurance policy is hospital cover from short term insurers
for South Africans wanting reasonably priced health cover.
These policies are sold by an insurance company in terms of the long-or short-term insurance Act.
When the premium holder falls ill, the policy pays for certain benefits. Of course,
within the policy, there will be some exclusions.
It was thought that medical insurance was providing products that resemble the
features of a medical aid, but with low-cost premiums.
Most of the time medical insurance excludes pre-existing conditions. In cases of
accidental injuries for instance, it will pay out a set amount into your bank account. Medical Insurance
may often also include death and funeral cover with your plan.
contrast, a medical scheme is required by law to pay for the treatment of a list of 270 prescribed
minimum benefits (PMBs). They also have to pay for the treatment of 26 chronic conditions as well as
in-hospital benefits according to the NRPL or National Recommended Price List.
The Demarcation Regulations want to address the fact that some health insurance
products are too similar to some of the benefits that medical schemes offer. These Regulations specify
the kinds of health insurance policies that are allowed under the Short-term Insurance
The proposed conditions on health insurance products are meant to ensure that the sale
of health insurance policies doesn’t diminish medical schemes.
It is thought that these health insurance products cause harm to the
medical scheme’s environment because they attract younger, healthier people away from medical schemes.
It means that the older, less healthy people who are dependent on medical schemes for their cover will
see an increase in costs.
The Second Draft Demarcation Regulations
These take into account comments from the first draft. The revised draft recognises
the role that health insurance policies play, but these products have to complement medical schemes. The
Second Draft Demarcation Regulations will still allow for the continued sale of Gap Cover and Hospital
Cash Plan insurance.
The second draft Demarcation Regulations aim to define and regulate health insurance
policies from medical schemes.
There are several categories of health insurance policies that are seen to be doing
the same sort of business as that of a medical scheme -
◼Cover for shortfalls
in medical payments – gap cover:
draft Regulations suggested banning gap cover products, but these policies can continue, provided they
operate under strict product parameters and are also monitored.
Plans pay out a benefit with hospitalisation and these stated benefits aren’t related to the actual
cost of any medical service. It covers costs such as loss of income while in
◼Primary healthcare insurance
provide limited medical service benefits. Services include the likes of emergency medical care,
dentistry and GP visits.
have to complement medical schemes and will also be subject to
The saga continues. Now it seems that the latest announcement by the
Council for Medical Schemes is that no primary health insurance plans (hospital cover from short term
insurers) will be
permitted after March 2021.
Go here for a table of