Admed Gap Policy Demarcation Regulations
On the 23rd of December 2016 Finance Minister Pravin Gordhan and Health Minister Aaron Motsoaledi published the long-awaited Demarcation Regulations under the Long-term and Short-term Insurance Acts.
The Demarcation Regulations, which come into effect from 1 April 2017, will create a line of demarcation between the products that a medical scheme can provide and those which an insurer can provide.
The publishing of these Regulations marks a significant step forward for the gap provider industry. The Demarcation Regulations represents the Regulator's formal acknowledgement of gap cover's place in the providing of comprehensive health insurance solutions to South Africa's medical scheme members.
What do the Regulations mean for Admed policyholders? As an existing policyholder with Admed, your policy will not be required to comply with the Regulations until 1 January 2018. This means that your benefits and your premium will not change for the remainder of this year.
How will the Regulations affect your cover from 1 January 2018? · Your shortfall benefits will be capped at R150 000 per insured person per year. It is encouraging to note however, that Admed has never received a shortfall claim of more than R150 000, which means that the cap will have very little (if any) impact on your benefits. It is also important to note that lump sum benefits will not be included in the calculation of the R150 000 per insured person per year. · There may be some changes to your additional benefits (specifically the Fixed dental repair due to accidental injury and the Lump sum long-term hospitalisation benefits) to ensure that Admed's products comply with the Regulations.
Where to from here? Although the Regulations have brought about some uncertainty surrounding the current design of gap products, they have also provided much needed clarity in respect of future Regulation-compliant product design. It is with this in mind, that Admed has already begun their 2018 benefit-design journey to ensure that we continue to offer you a comprehensive range of value-for-money benefits that meet your gap cover needs.
We will continue to engage with you on any further developments in the regulatory environment, however, in the interim please rest assured that your cover for 2017 will remain unchanged.