Medical aid schemes 'breaking the law'

Some of the country's biggest medical aid schemes have been accused of violating consumer laws - but that is about to change.

Frustrated scheme members have for years complained about rules and regulations being imposed on them without consultation. Some of the regulations have been labelled unconstitutional and discriminatory by the National Consumer Commission.

A recent investigation by the commission, the newly established national consumer watchdog, has alleged that the top five medical schemes are among many violating consumer-protection laws.

The investigation has spurred the Council for Medical Schemes to establish a committee that might try to amend legislation.

Consumer Commissioner Mamodupi Mohlala yesterday said that a preliminary analysis of medical scheme rules had found that schemes were contravening at least eight provisions of the Consumer Protection Act, which came into effect in April.

Highlighting some of the initial findings during a presentation at a conference of brokers in the Drakensberg, Mohlala said the commission's investigation was triggered by complaints, most of them from pensioners.

Most centred on the elderly not being able to understand the terms and conditions of the medical aid schemes.

"Pensioners are classed as vulnerable consumers and some of them don't have the ability to understand the complex terms. The law states that all contracts must be provided in plain and simple language," said Mohlala.

Her investigation, led by senior legal and medical experts over a two-month period, unearthed several regulations that would probably have to be amended.

The commission's preliminary analysis of the medical schemes' rules agreements revealed that:

• In certain instances, rules are provided to consumers only after the agreement is entered into;
• Schemes require applicants to consult a doctor nominated by them - which is contrary to consumers' right to select suppliers;
• The boards of the schemes may, in their sole discretion, impose a waiting period in respect of members or dependants, which might exclude members from accessing services, which, according to the Consumer Act, is discriminatory;
• Some schemes prevent women who fall pregnant within nine months of joining the scheme from claiming for the pregnancy even though they pay full premiums;
• Some schemes require that members give three months' notice when terminating their membership, whereas the act deems 20 business days to be reasonable;
• Members over 36 are penalised for being late joiners and pay higher contributions.

According to the act, it is unfair when a consumer is discriminated against on the grounds of age.

The consumer commission has jurisdiction over every transaction involving the promotion of goods or services, including those offered to medical aid members.

Mohlala said her aim was not to "tread on people's toes" but to ensure that consumers were not exploited.

Before her investigation, Mohlala's office had discussions with the Council for Medical Schemes. Shortly after their meeting, in May, the council sent out a circular to the medical schemes inviting comment on how the Medical Aids Schemes Act should be brought into line with the Consumer Act.

The Council for Medical Schemes' legal head, Craig Burton-Durham, said the council would have to discuss the effect of the consumer act and come up with ways of working with the Consumer Commission because there are overlapping regulations.

Mohlala's office will write to the top five medical schemes on Monday, encouraging them to engage in a corrective process.

Jonathan Broomberg, chief executive of Discovery Health, said that though it had received requests for information from Mohlala's office, it had not been notified that the scheme was not in compliance with the act.

"Discovery Health has received a request for information from the office of the Consumer Commissioner that will contribute towards an industry assessment the commissioner is conducting," said Broomberg.

He added: "A few consumer complaints have been directed to us and in all instances we have provided comprehensive evidence of our adherence to the Consumer Protection Act."