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Fedsure prunes hybrids
Business Report
2000-08-18

Fedsure Health will remove the controversial insurance component from its hybrid medical aid products that created controversy and spurred the demarcation debate between medical schemes and healthcare insurers, it said on 16/8.

Fedsure Health will remove the controversial insurance component from its hybrid medical aid products that created controversy and spurred the demarcation debate between medical schemes and healthcare insurers, it said on 16/8. 

Hybrid products combine medical aid with insurance. The hybrid products developed by Discovery Health and Fedsure Health, incorporating an insurance element in conjunction with a medical scheme product, occasioned the debate. They maintained that the insurance element would be regulated by insurance acts while the Medical Schemes Act would regulate medical scheme products. The Council for Medical Schemes disputed this at the end of last year. Discovery withdrew and changed its product, which was subsequently registered. The Council threatened legal action against Fedsure Health, whose hybrid product was never registered. 

The demarcation debate created uncertainty in the insurance and medical schemes industries, and revolves around the interpretation of what constitutes the business of a medical scheme. 

Fedsure Health's product range will be retained for existing members of Fedsure Health for the rest of the year, which means contributions and benefits will not change until next year.  Patrick Masobe, the chief executive of the Council for Medical Schemes, said the demarcation debate had been largely resolved between the council and the financial services board, the insurers' regulatory authority. Masobe said the council had taken issue with the marketing of health insurance products that do the business of medical schemes. We believe these products are often sold on a discriminatory basis - they force members who want comprehensive cover to take out additional cover at a high cost. 
(Source: Business Report,17/8/00)

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