Discovery bows out of insurance row
MEDICAL COVER
By LUCIENNE FILD
DISCOVERY Health this week opted out of the dispute between the Health Department and the insurance industry over the demarcation of medical insurance and medical aid schemes. At least for now.
The company has removed the troublesome medical insurance portion from its new product range and was rewarded this week with a stamp of approval from the Registrar of Medical Schemes.
The Discovery Health Plan now consists of a medical scheme from which specialist health care benefits and hospitalisation are paid, and a medical savings account which covers day-to-day nonhospital expenses.
Adrian Gore, CE of Discovery Health, says since the medical insurance formed a small portion of the whole product, the company decided to cut it out.
He says this does not, however, resolve the demarcation debate.
Fedsure Health, another company in trouble with the Health Department, is, however, refusing to remove the medical insurance from its product range and has taken its case on appeal to the Medical Schemes Council. The appeal will be heard later this month.
Dave Avnit, CE of Fedsure Health, says capitulation will not solve the problem.
He says the insurance industry collects around R10-billion a year through medical insurance products. "This is a big debate and it needs to be resolved," says Avnit.
It was the launch of the Discovery Health Plan in October last year that sparked the battle between the Department of Health and the insurance industry.
The health plan came on the market two days before the new Medical Schemes Act regulations were gazetted, and it was meant to be the industry's first regulationcompliant product.
Instead, Discovery ended up in conflict with the Health Department and was accused of circumventing the Medical Schemes Act.
Not long after, Fedsure Health landed in a similar dispute.
The Health Department says medical insurance performs the same function as a medical scheme and must therefore be registered as such. From January 1 the schemes will be prohibited under the Act from discriminating against the ill and elderly.
Medical insurance policies do not fall under the Act, so an insurer can refuse the sick or the aged.
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