Some time ago a woman was denied surgery and had her Discovery Medical Aid membership terminated. This was as a result of her non-disclosure of chronic medication. JustMoney decided to look into the grounds for medical aid termination.
In response to the above, Discovery through their reputation manager, Thulaganyo Khensani Mthombeni stated: “Termination for non-disclosure is standard practice by all open medical schemes, and entirely consistent with the law, and supported by CMS (the Council for Medical Schemes).”
Non-disclosure of any information about an applicant’s health, symptoms and medication is considered fraudulent. It further places risk on the medical scheme and its existing members. As such, the membership may, according to the rules of Discovery Health Medical Scheme (DHMS) and the regulations by the CMS, be immediately terminated.
Mthombeni further stated that such information is required and is vital in the application process.
“When we receive a request for authorisation of in- or out-of-hospital healthcare services within the first year of membership, we automatically pend the request and review it for any material non-disclosure in the original application. Where there is evidence of material non-disclosure, we contact these DHMS members for further details.
“Unless there is a clear and valid reason for not providing certain details, the membership is terminated and we inform the person in writing,” he added.
However, such decisions can be reviewed and appealed by the independent Disputes Committee as well as further reviewed by the CMS. Mthombeni highlighted that the CMS has ‘consistently supported decisions by DHMS to terminate membership for material non-disclosure.’
The CMS’ view on non-disclosure
“Information from CMScript, issue 5 of 2014. Section 29A (7) of the Medical Schemes Act deals with non-disclosure. It states that the applicant has the responsibility to disclose information about previous medical treatment. Non-disclosure of any material information may lead to termination of the membership of either the main member or dependants,” Mthombeni explained.
Applicants must further disclose any information around diseases and conditions that:
-Anyone listed as a member, whether it be the main member or dependant, suffers from on the date of application.
-The member was diagnosed with and treated for in the last 12 months.
-Any medical advice was obtained for – whether it be a doctor or a pharmacist.
“Application forms also include a question where the applicant should indicate any symptoms or illnesses that was not specifically diagnosed by a doctor or for which no specific treatment was provided,” remarked Mthombeni.
How does the disclosing of such information affect premiums?
Under the Medical Schemes Act (MSA) there is only an allowance for limited underwriting protections for medical schemes, and even then strict application conditions are imposed.
Schemes may enforce the following:
-Late joining penalty fees: “For applicants joining a medical scheme for the first time later in life, medical schemes are permitted to charge a loading on the contribution. This applies to applicants older than 35 who join a medical scheme for the first time or re-join after an extended gap in membership. This penalty applies from joining, and continues for the full period of the membership,” said Mthombeni.
-Three month waiting period before claiming: A waiting period may be applied for up to three months from joining the medical scheme for some categories of applicants. DHMS specifies which claims the waiting period will apply to in the offer letter.
-A 12-month condition specific waiting period before claiming for a specific condition:A waiting period for claims for a specific and related condition may be applied for up to 12 months on certain applicants’ memberships.
"Applicants are advised of late-joiner penalties and applicable waiting periods before the membership starts. The late joiner-penalty is based on age and membership of a medical scheme, not on health or medical information. Waiting periods that may apply affect the date from which members may claim, not the contribution to DHMS,” added Mthombeni.
Non-disclosure undermines the limited ability of schemes to underwrite, and would lead to even greater anti-selection against schemes than is currently the case.
Termination in this instance is the only legal consequence as the scheme rules do not allow for penalty payments, stipulated Mthombeni.