The bid by the Council for Medical Schemes (CMS) to strike a deal with seven open medical schemes, plus the Government Employees Medical Scheme, to on-board members of Health Squared without underwriting and waiting periods has failed, the regulator announced yesterday.
Read: CMS to oppose Health Squared’s bid for voluntary liquidation
In a statement, the CMS said a few of the schemes committed to migrating members without underwriting or waiting periods, but this would not be enough to ensure cover for all Health Squared members.
At the end of July, the scheme said it had 14 228 principal members and 23 785 beneficiaries.
“Despite the unfortunate situation in which the engagements ended, the CMS hopes that individual schemes will consider enrolling Health Squared members without waiting periods, where doing so will not jeopardise the interest of their members,” the CMS said. (See below for more on waiting periods.)
Health Squared announced on August 18 that it had launched an application to wind up its business. It told members it would not take contributions or pay claims after 31 August.
Health Squared advised members to seek alternative cover, but the CMS subsequently told members to wait while it tried to broker a deal to transfer them to other schemes without underwriting.
The application for voluntary liquidation, which was due to be heard in the High Court in Johannesburg on August 30, has been postponed to today. The court is expected to rule on whether it will grant Health Squared permission to bring the application.
The CMS, which wants to place the scheme under curatorship, said it will oppose the application.
The regulator said Health Squared still exists until the High Court orders otherwise; therefore, members who apply for membership with other schemes must first terminate their membership with Health Squared.
Kidney specialists want liquidation postponed
The South African Nephrology Society, which represents kidney specialists, has filed intervening affidavits to postpone the liquidation of Health Squared by two months.
Business Day quoted the society’s president, Shoyab Wadee, as saying that Health Squared has about 50 beneficiaries who are kidney patients requiring regular dialysis or transplant treatments, without which they will die.
Business Day reported as follows:
Treatment is costly and they cannot risk even a short break in care, he said. Kidney dialysis costs up to R30 000 a month in the private sector, and public sector facilities were not a viable alternative, he said.
“The public sector is full, and they will be sent home to die,” said Wadee. “All our patients are scrambling. They are desperate.”
In his application to intervene in Health Squared’s liquidation application, Wadee said the scheme had indicated in its founding affidavit that it had sufficient funds to cover claims until the end of the year.
Earlier this week, Business Day reported that Health Squared’s administrator, Agility Health, was holding discussions with the scheme to try to ensure its most vulnerable members, such as those who were hospitalised, or receiving renal dialysis or ambulatory oxygen, did not face a break in healthcare services or unpaid medical bills after August 31.
It quoted Agility Health’s chief executive, Tebogo Phaleng, as saying: “We are asking the scheme to continue paying for specific scenarios [beyond the August 31 deadline]. There are legal considerations, but there are ethical and compassionate considerations as well.”
Health Squared members face waiting periods
In its statement yesterday, the CMS set out the underwriting and waiting periods that might be imposed on Health Squared members who join other schemes. These are provided for in section 29A of the Medical Schemes Act and can be imposed even if members change schemes because their scheme is liquidated.
Waiting periods
Members who have belonged to Health Squared for a continuous period of up to 24 months, ending less than 90 days before applying for new membership, might be subject to condition-specific waiting periods. However, such a waiting period shall not affect the payment of prescribed minimum benefits (PMBs).
Members who have had continuous cover of more than 24 months, terminating less than 90 days immediately before the date of application, may be subject to a general waiting period of up to three months, except in respect of the PMBs.
Condition-specific waiting periods
The duration of a condition-specific waiting period is 12 months, or the remainder of 12 months if an applicant or their dependants changed schemes while a 12-month condition-specific waiting period was still in force.
The member/dependants are not entitled to claim benefits for healthcare services in terms of any pre-existing condition for which medical advice, diagnosis, care, or treatment was recommended or provided during the 12 months preceding the date on which they applied to join the scheme.
Any pre-existing medical condition suffered by the member/dependants must be fully disclosed in the membership application form. The scheme must determine the applicable underwriting condition for each member/dependant.
CMS answers members’ questions
Earlier yesterday, the CMS posted on its website a list of answers to questions that members of Health Squared might have. Some of the answers to the FAQs have been rendered superfluous by the collapse of the migration discussions.
The questions and answers included:
Contributions are payable in advance – will members be liable to Health Squared on the new scheme on 1 September?
According to the letter issued by Health Squared to members, members will be covered for their claims arising from health events up until 31 August 2022, provided that their contributions have been duly paid. In relation to those members who pay their contributions in advance, their contributions will be up to date to cover claims incurred until 31 August 2022.
Can I still get pre-authorisation for a health event?
The CMS’s answer repeats what it said in response to the previous question, with the addition of this sentence: “It is expected that these should include authorisations.”
Will members on ongoing oncology treatment still be covered going forward?
Yes, as oncology is one of the conditions covered under the prescribed minimum benefit level of care, for which all medical schemes must provide a basic level of cover. This basic level of cover includes the diagnosis, treatment and costs of the ongoing care of these conditions.
