Healthcare is evolving at an unprecedented pace, with an ever-expanding array of medical insurance offerings on the market. However, it's essential to understand what a medical scheme entails, as this knowledge forms the cornerstone of informed healthcare decisions. CMP’s mission is to ensure that you not only comprehend the concept of medical schemes but also understand how they differ from the multitude of alternatives out there. With countless options fighting for your attention, our goal is to empower you with the knowledge needed to make the right choices for your health and financial well-being. Let’s get started!
A Medical Scheme Belongs to Its Members
All medical schemes are not-for-profit organisations, devoid of shareholders and dividend payouts. They operate by pooling contributions from their members, essentially forming a mutual fund owned collectively by those who participate. The scheme's day-to-day operations are overseen by an elected Principal Officer, with guidance from a Board of Trustees. Crucially, at least 50% of the Board must consist of scheme members themselves.
Administration Companies and Brokers
While medical schemes may enlist the services of third-party administrators, it's not mandatory. Administrators, if utilised, must be accredited and may charge fees for their services, such as managing memberships and processing claims. It's worth noting that administration companies operate for profit, unlike the medical schemes they serve. Additionally, some schemes may employ brokers to assist with enrolment, and brokers often charge a commission fee for their services. These fees are categorised as non-healthcare costs and are covered by pooled member funds.
Solvency Ratio
Every scheme is legally required to maintain a minimum 25% solvency ratio. This percentage represents the portion of annual member contributions held by the scheme at any given time. It ensures that funds are available to cover member claims if necessary. Notably, CMP boasts one of the highest solvency ratios, well above the legislated minimum.
Joining a Medical Scheme: Risk Assessment and Waiting Periods
Open medical schemes must accept prospective members, provided they can afford the required contribution. However, the scheme may impose restrictions based on the applicant's health, a process known as underwriting. These restrictions manifest as waiting periods. There are general waiting periods for all new members and condition-specific waiting periods for those with pre-existing health concerns. Once the waiting period elapses, these restrictions are lifted.
The Dangers of Non-Disclosure
Honesty is paramount when disclosing pre-existing medical conditions and previous memberships during the application process. Failure to provide accurate information can lead to claim denials or even membership termination. The Council for Medical Schemes considers non-disclosure, whether intentional or not, a significant matter.
Membership and Industry Interaction
The way a scheme interacts with the broader healthcare industry is shaped by governing bodies, fee structures and legislation. It's a complex system that often remains uncharted territory for many, but we're here to shed light on these critical aspects.
Prescribed Minimum Benefits (PMBs)
PMBs represent the minimum coverage that all medical schemes must provide. These benefits encompass a wide range of medical conditions, chronic diseases and emergencies, ensuring that members are covered for life-threatening issues. Schemes are obligated to pay for PMB treatment, though the fees charged by healthcare providers are not regulated. To manage costs, schemes may impose co-payments and payment shortfalls if a member exceeds the scheme's tariff.
Medication Costs
The government introduced a Single Exit Price for medicines in 2004, regulating medicine pricing. This has implications for the cost of medications, with only a dispensing fee added to the Single Exit Price.
ICD-10 Codes
ICD-10 codes, used globally, play a crucial role in diagnosing and classifying medical conditions. They facilitate efficient communication between medical practitioners and schemes. Medical practitioners must include ICD-10 codes on all statements, especially for PMB cases, where accurate coding ensures proper allocation of benefits and treatment decisions.
Now that you have a better grasp of medical schemes, we're here to assist you with clear information and expert guidance. Please don't hesitate to get in touch if you have any questions or need further assistance.