The regulations also seek to address the risk of possible harm caused by health insurance products drawing younger and healthier members away from medical aid schemes to health insurance products.
They are the outcome of a joint process between the National Treasury, Department of Health, Financial Services Board (FSB) and Council of Medical Schemes. Industry stakeholders involved in the process included the Association of Savings and Investments South Africa and the South African Insurance Association.
The regulations give effect to the amendments made to the Insurance Laws Amendment Act of 2008, to allow for specific categories of health insurance products which will be allowed to be sold to the public, despite such products constituting the "business of a medical scheme" as defined in the Medical Schemes Act (MS Act).
Government wants to phase in the National Health Insurance Scheme for South Africa with up to R1 billion set aside this year for NHI-related projects.
"The regulations are required to strengthen and preserve the social solidarity principle that underpins medical schemes," said the Treasury.
By pooling healthier and sicker individuals, cross-subsidisation is made possible through medical schemes, it said.
Those of poor health do not pay contributions according to their health status, a factor which makes medical aid contributions affordable to a lot more people than would have been the case otherwise.
Health insurance products, on the other hand, operate on the basis that the policy holder pays a premium that is determined by the policy holder's age, health status or income. Health insurance policies also have exclusionary clauses, which can limit to whom the policy can be sold.
In determining whether health insurance products will or will not be allowed to be sold to the public, regard was given to the objectives of the MS Act and the current or potential harm that a health insurance policy may cause to medical schemes environment.
"Health insurance products which will be allowed to be sold to the public in terms of the regulations will fall outside the scope of the MS Act and will be subject to regulatory oversight by the FSB".
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