When you join a medical scheme or gap cover, it is important to understand that waiting periods may apply to the cover. These depend on how long of a break there has been in your cover as well as how long you have had cover for, along with other factors. Understanding what waiting periods may apply, and importantly, why medical schemes and insurers have them, is key to making the most of your cover.
How are waiting periods imposed
Both medical schemes and gap cover providers can impose a three-month general waiting period and a 12-month condition-specific waiting period. The general waiting period means that there will be no cover for a period of three months, while the condition-specific waiting period means that the provider will not pay for costs associated with certain conditions, which will be specified up front when cover is taken out.
Waiting periods that are imposed depend on how long you have had medical scheme or gap cover, as well as how long the break has been in your cover. For example, if you have had a break in medical scheme cover of less than 90 days and the previous membership was longer than 24 months, then the maximum waiting period that can be imposed is a three-month general waiting period. During this time, you will still have access to cover for Prescribed Minimum Benefits (PMBs). However, if you have never had medical scheme cover, then this three-month general waiting period applies, and you will not have access to PMB cover. The 12-month condition-specific waiting period may also apply.
If you have been on a medical scheme for a continuous period of up to 24 months with a break of less than 90 days, you will also be subject the 12-month condition-specific waiting period except in respect of any treatment or diagnostic procedures covered within the prescribed minimum benefits
If a member has had a break in medical scheme membership of more than 90 days then there will be a 3-month general waiting period and condition specific waiting periods of up to 12 months and a member will not have access to treatment or diagnostic procedures covered within the prescribed minimum benefits while a member is within a waiting period.
Gap cover is slightly different, since it is short-term insurance Prescribed Minimum Benefits are not applicable, but providers can still apply a three-month general waiting period and 12-month condition-specific waiting periods for new members or members that have had a break in cover of more than 90 days. However, if you have been a member of gap cover and switch providers, they can only apply the balance of the 12-month waiting periods for benefits that you currently have and / or apply 12 month condition specific waiting periods to benefits that you did not previously have. In addition to this a 3 month general waiting period may also be imposed.
Why the waiting periods?
Waiting periods are in place primarily to protect the long-term sustainability of medical schemes and insurers by preventing something called anti-selection. This is when people join a medical scheme specifically because they have a condition that requires expensive cover, obtain their treatment, and then exit the scheme. The premiums paid by such a member will be far outweighed by the cost of the treatment.
Ultimately, the success of a medical scheme or an insurer relies on shared value, with ongoing contributions from all members building up and creating a pool of resources for everyone to tap into. The basic model is one of cross-subsidising – when you are healthy, you are helping to pay for the treatment for someone who is not, and then when you need medical assistance, others will help to cross-subsidise your treatment.
Cover for you when you need it
Medical schemes cannot discriminate based on health, age, gender or any other factor, and must offer the same benefits for the same premiums regardless. For healthy individuals, this may not seem like a fair deal – we need to remember that we simply do not know what the future holds. A completely well individual with a normal pregnancy could still end up with a baby in the neonatal intensive care unit, and this would cost a fortune without the assistance of a medical scheme. Covid-19 has really driven this home, with previously healthy and young people requiring extensive hospital care.
The reality is that without these waiting periods, anti-selection would be rife, and premiums would skyrocket. Waiting periods are a form of risk management, designed to ensure long-term sustainability of medical schemes and insurers, so that when we as members need medical treatment, the money will be there to cover us.