In response to an enquiry from one of our compliance officers, we conducted research on information published on these products that appear to be problematic to government.
Finmark Trust conducted two studies:
- In 2012, it published a Review of the South African Market for Hospital Cash Plan Insurance and
- In 2012, A Demand-side perspective on Hospital Cash Plans in South Africa.
In the 7 July Moonstone Monitor, we quoted the Minister of Health as saying:
“Treasury is very concerned about the adverts punting hospital cashback plans. There is no secret about this. It actually encourages people to admit themselves into hospital in order to get the promised money. The Department of Health is in consultation with Treasury and Minister Pravin Gordhan is on the brink of making an announcement which will make these products illegal,” says Dr Motsoaledi.”
I actually managed to trace the Finance Minister’s speech schedules, but could not trace any engagement where the future of these products was to be discussed. Taking into account how long we had to wait for the White Paper on healthcare insurance, the expression “on the brink” probably has different meanings for different folks.
Those who wish to avail themselves of the various products available in this space are welcome to read the executive summary of the review published in 2012.
For a perspective on how consumers actually view hospital cash plans, please read the executive summary from the 2013 document.
A concern raised by them was the fact that the minimum hospitalisation period was three days. No doubt, this is to safeguard the interests of product providers, and to stem fraudulent claims.
The latter document concludes as follows, on the topic of fraud in the market:
“Individuals in Durban, in particular, were aware of customer fraud with respect to HCPs. All were aware of the negative impact of such activities, mainly in terms of complicating the claims process (i.e. making it longer and more tedious), but also in that it will lead to premium increases.”
Both studies are available on the Finmark website.