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After R400,000 in bills, a family’s medical aid was cancelled – now a court says the scheme must pay

Business Insider SA
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  • Profmed has to honour claims on some R400,000 of medical bills one family ran up in their first year of membership, the high court has ruled.
  • The medical scheme said the principal member had withheld information on her application – and refused to pay the family's claims. 
  • But a medical aid can not retroactively cancel membership for failing to tell it about minor prior conditions, the high court ruled.
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Profmed must un-cancel the membership of a family who ran up R400,000 worth of medical bills in their first year on the scheme, and pay their claims based on normal criteria, the high court ruled this week.

Medical schemes are not entitled to cancel membership because someone failed to mention minor conditions on application, the high court in Cape Town said – even if that is what an appeal board for medical schemes said.

Profmed terminated the membership of the primary member, and so her dependents, in November 2016, ten months after they had joined. It also refused to honour bills for "several medical procedures" that ran to hundreds of thousands of rands. 

It kicked her out, Profmed later argued, because she had failed to disclose medical procedures in 2015, procedures of the sort that would have allowed it to properly calculate her risk as a member.

Other than prescribed minimum benefits, which must be covered in full for every member of a scheme, medical aids can imposed specific periods of up to 12 months before accepting the risk for pre-existing conditions. They can also deny membership for a failure to disclose a material condition – and that is the only basis on which membership can be cancelled.

Both the Council for Medical Schemes and an appeal board agreed that Profmed had the right to kick the family out and leave it to face its own bills, but they got the law wrong, the court said.

"There is no duty on a prospective applicant for medical insurance... to disclose a condition that is immaterial or non-existent, said acting judge James Lekhuleni. 

Also, "most importantly", said Lekhuleni, the member had been helped to fill in her forms by a representative of Profmed, who had full access to her medical records.

Profmed must now pay its "contractual commitments", the court ruled, as well as the costs of the legal challenge. 

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