After doing your research and finding the best medical aid scheme, you are ready to submit your application. Do not be too hasty as this crucial final step to securing private health care cover requires that certain conditions be met. The two most vital of these conditions are waiting periods and late-joiner penalties. Both of these conditions could have significant financial and health implications, so it is best to know your rights and educate yourself about why these conditions are applied. It is also vital that you do not provide false information in order to bypass these restrictions and penalties as doing so could result in you being without health care cover.
Medical aid schemes, like most forms of health insurance, rely on a large membership base of young healthy people to support the healthcare needs of a small number of older, sicklier members. People who join medical schemes later in life are regarded as having skipped the supporting phase of membership and thus need to make up for this through higher premiums. These penalties are meant to encourage people to join schemes while they are still young and healthy.
Open medical schemes cannot turn down applications based on age, but can enforce late-joiner penalties in order to negate potential negative financial implications of adding older people as members. These late-joiner penalties can be applied to anyone who either joins a scheme or is added as a beneficiary on and after the age of 35 years. It is also important to note that this penalty will also apply if you have a break in medical aid cover anytime after the age of 35 years. If you decide to change schemes after this age you need to ensure that your application to your new scheme is accepted before cancelling your old scheme. This will ensure that no break in cover occurs. It is also important to note that should you belong to a scheme that has imposed a late-joiner penalty and then switch schemes, this new scheme may impose the same penalty.
If a late-joiner penalty applies then you will need to pay a loading on your contributions for as long as you are a member. This loading is scaled and can be worked out as follows: Add the number of years that you have had cover to 35. Subtract this number from your current age. For example, if you have had 4 years of cover you would add this to 35 giving you a total of 39. If you are 40 years old you subtract 39 from this leaving you with 1 year without cover. Loadings are scaled as follows:
- 1 to 4 years without cover = normal contribution x 0.05
- 5 to 14 years without cover = normal contribution x 0.25
- 15 to 24 years without cover = normal contribution x 0.50
- 25+ years without cover = normal contribution x 0.75
Waiting periods can be imposed on new medical aid members or to old members who had a break in cover. Harsher waiting periods can be applied to new members who have never been members of any other medical aid scheme. Waiting periods are used to prevent people from only joining a scheme once they are sick or in need of benefits. Generally schemes impose a 3-month waiting period on all benefits and a 12-month waiting period on benefits related to specific conditions. Waiting periods are especially relevant to pregnant woman who start looking for cover after they have discovered that they are pregnant. Joining a medical scheme once already pregnant will not provide cover for the birth although there are some schemes that are willing to provide cover provided that certain additional clauses are met such as remaining a member for a certain number of years after the birth.
If you are unsure of how late-joiner penalties and waiting periods apply to your specific situation, then consult a medical aid broker. Failure to do so may result in you having to pay penalties or to go without medical aid cover while sitting through waiting periods.
Stuart Broad is a marketer who works for a number of South African Medical Aid Schemes sites. If you are looking for a budget for medical schemes, he recommends trying to get Medical Aid Quotes at Cheapmedicalaid.