Underwriting of medical aid schemes explained

I OFTEN get the query as to whether a medical scheme can refuse membership to an applicant – the short answer is no.

It doesn’t matter how old you are or if you have never had a medical aid before. It doesn’t even matter if you don’t have a South African ID – you can apply at any age and with a passport in lieu of an ID. Medical schemes should extend cover to anyone whom can pay the monthly contribution.

That being said, there are a few things that the schemes can do to protect themselves. Your medical aid application will go through a process called underwriting, whether you have had previous cover, are moving from one cover to another or even if you have never had cover. The medical scheme you are applying to can impose the following types of underwriting:

Three-month general waiting periods;

12-month condition-specific waiting periods;

Late-joiner penalties (applicable from the age of 35)

Let’s break this down further and see what type of underwriting is applicable in different cases.

In the first case, let’s assume that you are currently with Scheme A and have been covered for two or more years.

If you have decided to move directly to Scheme B with no more than a 90-day gap between memberships, then the most that Scheme B will be able to impose is a three-month general waiting period and this with access to Prescribed Minimum Benefits (PMB).

What this means is that during your waiting period, you will have access to cover for life-threatening emergencies and chronic conditions.

Now let’s assume that you have had no previous cover, less than two years’ previous cover or a gap of more than 90 days between your last medical aid cover and the new one – in cases like these you can be fully underwritten.

This means that the scheme you are applying to, can impose a three-month general waiting period, during which you will have absolutely no cover.

They can also impose a 12-month condition-specific waiting period. For example, let’s say you have fallen pregnant before applying to join a scheme, as the pregnancy is pre-existing it will be excluded for the first 12 months of your membership. You would then be liable for all claims incurred for both the pregnancy and the birth itself. The same would apply to having cholesterol or high blood pressure – the medical scheme is able to refuse cover for these pre-existing conditions for the first 12 months.

The last type of underwriting to be aware of, is late-joiner penalties. These are financial penalties which the schemes can impose. Late-joiner penalties are applicable to anyone over the age of 35 who has not had previous cover or whom has had breaks in cover. These penalties can range between 5% and 75% of the premium. This is also a permanent penalty – you will be liable for this penalty for as long as you remain a member. It is also important to note that when medical aids calculate applicable late-joiner penalties they do not consider medical insurance nor medical covers held outside the borders of South Africa as previous cover.

As the costs of private healthcare are so high, it is very important to have a medical aid in place. You aren’t able to take one out only when you need one – because that’s too late and you won’t have the benefit.

You can’t take out car insurance after you have had a car accident and expect it to pay out.

In the same way, you need to prepare and have proper medical aid in place to ensure that you are covered when a medical emergency does arise.

For assistance with medical aid, contact