Anti-Selection

Why can I only change my Benefit Option 1 January 2020

As a rule, you can only change your benefit option near the end of the year for the following year.

Paying medical claims

Medical schemes manage to pay claims that cost more than the member’s yearly contributions if the member is in hospital and needs expensive treatment. Where does the money come from?

By law, medical schemes are not for profit. Unlike insurers, we cannot charge more if a person is more likely to claim (older or unhealthy). In terms of the Medical Schemes Act each person who is on the same benefit option pays the same monthly contribution.

Sometimes you pay in more than you use that year, and other times other members’ contributions help you. There are limits to how much we pay for certain things so that we don’t run out of funds.

Cheating your fellow members

The system of pooling funds for contributions only works as planned if people join LA Health and remain members, and if members stay on the same benefit option the whole year.

By not paying a full year’s contributions for the benefits they received, these members use more money from pooled benefits than they pay in. When enough members do this, it puts severe strain on LA Health for the funds that are available to pay all our members’ claims.

We want to keep our monthly contributions reasonable

When members misuse medical cover, the medical scheme has to take steps to make sure they can keep paying claims now and in the future. This means that contributions will have to increase more each year, and that we have to be stricter about approving benefits. To keep our contributions affordable and to keep offering excellent benefits, we do not allow members to upgrade benefit options in the middle of the year.