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As the year-end rush approaches, many South Africans delay reviewing their medical schemes – a decision that could trigger a lifetime of unnecessary fees. Ignoring fine-print rules or failing to register chronic conditions can result in denied claims, costly copayments or lifelong penalties.
That warning came through clearly during the latest Daily Maverick Money Cents webinar, hosted by Business Maverick editor Neesa Moodley, with Zee Gumede, consultant at GDC, and Fazlin Swanepoel, head of Alex Forbes Health, where they discussed the most critical considerations for choosing a medical scheme for 2026.
The silent killers: waiting periods and late-joiner penalties
Your medical scheme must align with your health needs, life stage and the rules governing your cover – or the financial consequences can be severe. Late-joiner penalties are among the most overlooked – and potentially “lethal”, as Gumede described.
Anyone joining a scheme after the age of 35 without continuous, accredited coverage from a registered South African medical scheme faces a penalty calculated as a percentage of their monthly risk contribution.
Gumede warned that the penalty fee ranges from 5% to 75%, based on the number of years that you did not have medical scheme cover. Note that health insurance policies, which are popular because they tend to be less expensive than medical schemes, do not count as cover for this purpose.
“Try to join a medical scheme before you turn 35, or ensure you’ve had continuous creditable cover, either as a dependant or main member.”
New members will typically face underwriting. When you join a medical scheme, you can expect a general waiting period from three months up to one year. During this period, you pay contributions but only emergencies or prescribed minimum benefits (PMBs) are covered.
If you have existing conditions, such as pregnancy, kidney disease or mental illness, coverage can be withheld for up to 12 months for those specific conditions.
“Underwriting protects the scheme and its members from anti-selection (where people only join a medical scheme because they have been diagnosed with a condition that now needs to be covered), keeping the system financially sustainable and fair,” Swanepoel explained.
If you join a scheme as part of a group cover employment benefit, no underwriting applies and you may not have a waiting period imposed.
Health warning
It is illegal in South Africa to belong to more than one medical scheme at a time. However, if your cover is interrupted – for example, you resign from one medical scheme at the end of July and only join a new scheme in October – that could trigger a late-joiner penalty. It is critical to get the timing of your cover correct. You have to give your medical scheme 30 days’ notice if you are resigning. So, for example, if you want to switch medical schemes from the beginning of January, you need to notify your current scheme by 30 November and request that cover continues up to and including 31 December. Your new scheme cover must kick in on 1 January so there is no interruption.
How to compare and assess benefits
With more than 70 schemes in South Africa, comparing options can feel overwhelming. Swanepoel recommended that you consider a scheme’s financial strength, governance and risk management, and the value you will get as a member from the benefits. Strong schemes maintain reserves equivalent to the mandated 25% solvency ratio, make ethical decisions about benefits, and provide reliable service with quality provider networks and preventative wellness programmes, she said.
Network access vs cost
Many medical schemes offer options that include designated service providers (DSPs), including doctors, specialists, hospitals and pharmacies. Using an out-of-network provider can trigger upfront copayments. If you are planning to use a network option, ask the scheme for a list of the participating DSPs. You want to make sure that the GP and hospital DSPs, in particular, are close and easily accessible to you. “The last thing you want is to sign up for a network option, and then realise that the nearest hospital is two hours away,” Moodley noted.
Prescribed minimum benefits
PMBs are legally mandated, covering 271 conditions and 27 chronic illnesses including diabetes, hypertension and asthma. Swanepoel clarified that when it comes to PMBs, schemes pay for consultations, tests and medication in full, provided that you use designated service providers and follow the scheme protocols.
For example, a scheme may pay for a specific asthma inhaler in full, while a more expensive asthma inhaler would result in a copayment from you.
The crucial point is that cover for PMBs comes from the scheme’s risk pool, not your medical savings account. Gumede highlighted a common mistake – chronic conditions are not automatically picked up by your scheme.
You need a medical practitioner to help you register your chronic condition with your medical scheme, using the correct classification or ICD-10 code; and the onus is on you to make sure you have registered. If your condition has not been registered, costs will be paid out of your day-to-day benefits.
How to review your plan
Watch out for red flags. They include:
- Running out of medical savings account funds early in the year;
- Repeated upfront copayments;
- Chronic medications that are not fully covered; and
- Poor administration and service.
Take the time to review your medical scheme use over the past year. Gumede recommended contacting your medical scheme and requesting a comprehensive document setting out all your claims over the past year. This review will help you identify where you claim the most – hospital, chronic medication or GP visits.
Hospital plans
Hospital plans are a great way to reduce contributions and are typically less expensive than plans that offer day-to-day benefits. However, these plans are suited for younger, healthy people who do not have any illnesses, don’t get sick often and don’t visit the pharmacy often.
A hospital plan only covers you for procedures and treatment administered while you are in hospital and provided you have been admitted. Depending on the procedure or treatment, you may need to contact your medical scheme ahead of time to get a “pre-authorisation code”.
Note that if, for example, you have a bad case of food poisoning and you go to the hospital emergency room – where you are treated without being admitted – your hospital plan will not cover that.
All panellists agreed on the importance of consulting an independent financial adviser. Swanepoel concluded: “A financial adviser ensures your choice meets both health needs and budget through a comprehensive needs analysis.”
Loyalty schemes
Last, but certainly not least, loyalty schemes and health benefit programmes have become a large factor in dictating your choice of medical scheme. Depending on the scheme, these benefits range from gym membership to travel benefits, discounted movie tickets and even discounts on wearables such as sleep trackers or smartwatches. DM
This story first appeared in our weekly Daily Maverick 168 newspaper, which is available countrywide for R35.
