You Need

Non-disclosure in terms of medical aid means that the member has not disclosed all the medical information when applying for membership. Regardless of whether it was intentional or not, a medical scheme has risk management mechanisms in place for detecting non-closure and, if discovered, the member will be penalised in some form. 

“In fact, non-disclosure falls under the general umbrella of Fraud, Waste and Abuse (FWA),” explains Lee Callakoppen, Principal Officer of Bonitas Medical Fund. ‘Fraud’, in the medical scheme industry, is collectively used to describe deception, false statements or false representation resulting in an undue benefit. Non-disclosure is considered fraud and is viewed so seriously by the Legislature that it provides for termination of membership and it declared such behaviour, when coupled with the submission of claims against a medical scheme, as a criminal offence. 

‘Abuse’ is more likely to be unnecessary costs to the medical aid where the most cost-effective treatment was not followed or where the medical aid scheme was charged for procedures which were not necessary. While ‘waste’ refers to the overuse of healthcare services and incorrect billing. 

The consequences of non-disclosure

“It is essential to fully disclose your medical health when taking out life insurance, disability insurance, income protection and of course medical aid”, says Callakoppen. “Every dishonest act has a price tag attached to it, so it’s best to just be honest. Even the smallest act of dishonesty, whether intentional or not, can have devastating consequences for patients, their families and their doctors. No matter how long ago the healthcare issue may occurred, or how insignificant you think it is, rather play it safe and disclose all the information you can.”

Even though your medical aid might pay out initially, they will soon discover whether there was non-disclosure involved, at which stage you will be required to pay back all the claims you received. Medical practitioners and facilities are also able to claim against you personally. It can amount to hundreds of thousands of rands.

What you need to disclose:

It’s essential to disclose ALL your medical health details in the application form including medical history, treatment and any medication you or your dependents are taking. 

What will happen if you don’t disclose all medical information on the application form?

The medical scheme may end your membership immediately and/or reverse all claims they’ve paid. 

If you disclose the condition the medical scheme provider may impose waiting periods. This is to ensure that the best interests of members already on the scheme are protected as required by the relevant legislation. 

How do you avoid non-disclosure?

Be honest and disclose all information. Don’t forget to read the questionnaire carefully and regardless of whether you think it’s important or not, or whether the medical condition was years previously, include it in your application. Callakoppen says, “Go into more detail than you think is necessary.”

“Most of our non-disclosures involve pregnancy,” says Callakoppen. “Some women find out they are pregnant and realise the cost implications, so try and join a medical aid without admitting they are pregnant. It is impossible to hide this from the medical aid and once it has been established a Condition Specific Waiting Period is applied.”

He warns that even though the medical aid might pay out initially, when they realise the error they will require re-payment. “This is why we urge members to plan ahead. If you are thinking of starting a family, join a medical aid beforehand to ensure the pregnancy and birth are covered.” Other general non-disclosures include conditions such as endometriosis, cervical dysplasia, tonsillitis, diabetes etc. 

Callakoppen says, “it is just not worth it not to disclose all previous conditions and illnesses.”

“If you are uncertain whether a condition or treatment is relevant, rather err on the side of caution and provide too much information,” advises Callakoppen. “Or phone your broker or the call centre to ensure that your information provided at application cannot be disputed at a later stage.”

The NHI Bill, proposes a fund to purchase healthcare services on behalf of those persons eligible to join the fund. The question that must be asked is whether or not all South Africans are compelled to become members of the fund as it is proposed in the NHI Bill?

There are also important implications for purposes of applying the Bill of Rights to the fund, more particularly, the provisions of section 18 of the Constitution of the Republic of South Africa which provides that “everyone has the right to freedom of association.”

Therefore, on the face of section 18, all South Africans have the right to choose with whom to associate including whether or not to belong a National Health Insurance Fund.

Definition of user

In terms of the NHI Bill, a “user” is simply defined as “a person registered as a user.” The NHI Bill also deals with the persons who are eligible to join the Fund. The list includes South African citizens, permanent residents, refugees, inmates and certain categories of individual foreigners as determined by the minister of home affairs after consultation with the ministers of health and finance.

Importantly however, the NHI Bill does not contain a clause that compels any persons to belong to the fund. Therefore, on the face of the NHI Bill as currently proposed, there is no mandatory requirement for South Africans to join the fund.

This is a departure from previous iterations of the NHI Bill in which an express requirement existed both to become a member of the fund as well as to make a payment in respect of that membership. On that basis, there would be an argument to be made that the fund is to be established only for those who wish to join it and those who wish to continue with current funding models for obtaining their healthcare services would be entitled to do so.

But is that position both tenable and viable for purposes of maintaining the fund where only, potentially, a few members of the population elect to join the fund?

Perhaps the fact that the NHI Bill is silent as to mandatory membership of the fund is not necessarily an indication of the manner in which the NHI Bill intends to operate, which, once again, implicates the freedom of association provisions in the Bill of Rights.

Therefore, two sections of the NHI Bill may provide us with an indication of what, actually, is intended in respect of membership of the fund, being –

• clause 33, which purports to limit the benefits available from a medical scheme in so far as “medical schemes may only offer complementary cover to services not reimbursable by the Fund”; and
• clause 49, which outlines the chief sources of income of the fund, including general tax revenue, payroll tax and a surcharge on personal income tax.

Currently, medical schemes are able to provide a range of medical benefits to members as determined in the Medical Schemes Act. In so far as the NHI Bill prohibits medical schemes from offering benefits otherwise provided by the fund, this will mean that members of a medical scheme who currently enjoy particular benefits from that medical scheme, more particularly primary healthcare benefits, will mean that in order to obtain such benefits, one would have to be a member of the fund.

Therefore, and indirectly, clause 33 of the NHI Bill operates on the basis of a mandatory membership of the fund (for those persons eligible to join the fund).

Funding

In addition, due to the funding of the fund, as contemplated in clause 49, all South Africans, in one form or another, make payment for the establishment and maintenance of the fund.

Therefore, while a “membership fee” will not be levied, amounts will be deducted from tax-paying South Africans in order to provide income for the fund. Therefore, indirectly, tax-paying South Africans, at least, will be paying a membership fee or contribution to the fund.

Whether or not mandatory membership of the fund is desirable, will have to be tested against section 18 of the Bill of Rights. There are important Constitutional considerations to take into account when evaluating the overall impact and effect of the NHI Bill on the current architecture of, at least, the private healthcare sector in South Africa.

The overall implications of the NHI Bill, from a membership point of view, will have to be understood in the fullness of time and through the process of obtaining public comments on the NHI Bill as is currently envisaged through the Parliamentary process through which the NHI Bill must pass in order to become law.