Underwriting 

Underwriting

Since the inception of GEMS in 2006, we pride ourselves in providing equitable access to affordable and comprehensive healthcare benefits to all public service employees. We cater for our members’ unique social and economic situations by using a different operational model than traditional medical schemes.

We’ve put together the following measures to ensure that our members and their families have access to comprehensive healthcare:

• No condition-specific underwriting: Our members get full cover without any waiting periods if they join our scheme with chronic or life-threatening medical conditions.

• No penalties for new members: No penalties for people who’ve never had medical cover before (other medical schemes charge higher contributions for people who’ve never had medical cover before).

• Cover for eligible dependants: You can add your parents, grandparents, in-laws, nieces and nephews to your GEMS medical aid if they depend on you financially (other medical schemes have exceptions).

Over the years we’ve noticed an increasing number of members taking advantage of our favourable measures through anti-selective behaviour. This behaviour has increased our costs, leading to our members paying higher monthly contributions.

What is considered anti-selective behaviour?

• Members who only join GEMS when they need expensive medical treatment and cancel their membership with us soon after they receive the care or medical procedure they need.

• Members who add dependants on their medical aid only when they require medical interventions and removing them from the scheme soon after they receive the care they need.

• Members who belong to another medical scheme and only join GEMS when they retire.

Members who behave in this anti-selective manner get access to medical treatments and procedures at the expense of other members (who may have contributed to the scheme over a longer period). This kind of behaviour reduces our reserve funds to cater for the healthcare needs of our members and increases our member’s monthly contributions.

There are 8 591 members who joined and left the Scheme in 2015. Our research has shown that these members were three times more likely to go into hospital than members who had been with GEMS for more than a year. Collectively these former scheme members only paid R 30 million in contributions. However, by the time they cancelled their memberships the total value of their claims was R149 million.

This form of anti-selective behaviour is unethical and unfair to other scheme members and we are actively introducing processes to limit this kind of behaviour.

We’ve identified underwriting as one of the effective ways to reduce anti-selective behaviour.

Underwriting specific member categories

Underwriting refers to implementing a waiting periods before a member can claim. We use a prospective client’s previous medical information to determine whether we apply a waiting period before a client can join GEMS.

The GEMS board had a policy to exempt members from waiting periods in a bid to fulfil GEMS’ mission to provide equitable access to all our public service employees. The excessively high claims due to anti-selective behaviour by our members and service providers (mentioned above) hasn’t prevented our board from underwriting our member’s claims to protect the overall scheme.

GEMS will impose a three-month (general) and/or a twelve-month condition-specific waiting period from the 1st October 2016 for the following member categories:

• Principal members who cancel their membership and their dependants’ (who haven’t resigned from public service) and later wish to and have their membership reinstated.

• Dependants who cancel their membership and later wish to re-join -through the principal member.