An amended definition of “the business of a medical scheme” provided in section 264 of the 2013 Financial Services Laws General Amendment Act will come into effect on 1 April.
This was announced recently in the Government Gazette – completing the penultimate phase of a health insurance demarcation process initiated in 2012 with the aim of curtaining regulatory arbitrage, reports Pam Saxby for Legalbrief Policy Watch.
As has already been reported, new short and long-term insurance regulations specifying the types of health cover to be excluded from provisions in the 1998 Medical Schemes Act (MSA) were gazetted towards the end of last year.
By more effectively balancing policy objectives across the medical schemes and insurance sector, the amended Act and new insurance regulations are expected to prevent health insurance products from undermining ‘the social solidarity principles inherent in medical schemes’ and improving consumer protection – in line with ‘twin peaks’ financial sector regulatory reform imperatives. This is according to a National Treasury media statement issued at the time – among other things also noting that primary healthcare insurance policies providing limited medical service benefits will be exempt from the new legislation, pending the promulgation of a low-cost benefit option framework currently being developed under the MSA.
From 1 April "the business of a medical scheme" under section 1 of the MSA will mean "the business of undertaking, either for a premium or a contribution, the liability associated with one or more of the following activities: providing for the obtaining of any relevant health service; granting assistance in defraying expenditure in connection with the rendering of any relevant health service; or rendering a relevant health service, either by the medical scheme itself, or by any supplier or group of suppliers of a relevant health service or by any person, in association with or in terms of an agreement with a medical scheme".
[link url="http://legalbrief.co.za/diary/legalbrief-today/policy-watch/legislation-health-insurance-demarcation-complete/#redirect"]Legalbrief Policywatch report[/link]