Why you should never die before December

A few weeks ago I wrote a column on the insurance industry and specifically the problem that existed with the business interruption payments (or rather lack of payments). I also mentioned as an aside that my mum had a problem with her Discovery medical insurance following my father’s death and that, despite numerous phone calls, we were unable to sort it out.

Let me explain what happened.

My dad was brought into the Emergency Department by ambulance after what turned out to be a catastrophic brain aneurysm. My mum followed in her car and filled in all the paperwork and medical aid details when she got to the hospital. A few hours later my dad sadly passed away while still in the Emergency Department.

Shortly after his death, it became apparent from a statement from Discovery that they had exhausted my mum’s medical savings account (MSA) because apparently my dad had died before he was formally admitted to the hospital and thus they regarded him as an outpatient.

Given that a battery of tests including a very expensive brain scan was done, it meant my mum would have nothing left for the rest of the year.

In our mind, it was clearly a coding problem and so started a series of seemingly endless phone calls with the customer care (!) people who never came back to us as was promised. Until I mentioned it in my column.

Credit to Discover, not only was I then contacted by a very helpful man by the name of Sylvester Ramadu, but the MD also reached out to me via LinkedIn. After a few days, the issue was indeed corrected and my mum was assured that her MSA was again in credit and all was well. The MD was thanked and so was Sylvester (after I relayed the fact that we had heard of three more people that the same thing had happened to).

However, the next statement indicated that my mum owed Discovery R4 512 for my dad’s use of his MSA. We sighed and got in touch once again with the customer care centre, pointing them to previous correspondence from Sylvester (who was now on holiday). Turns out this was a different issue.

Before I go on, let me just assure you that I’m not using this column to fight my personal battles. I think I can safely and in all humility say that our family is not stupid. Between my two sisters, my parents and I, we have 16 degrees and not one of us knew what I’m about to tell you, which makes me think there is a much bigger issue here.

It turns out that if your medical insurance includes a savings account (to pay for GP visits, etc.), the medical aid allocates to you all your medical savings at the beginning of the year. You can use it whenever – so if you have a big medical problem in January you can use it all then, while they recoup the money from your contributions throughout the year. This seems very kind of them… except if you die. If you die before the end of the year and you have used all your “savings” (it is clearly a loan and not savings), your contributions - which you would have paid until December if you hadn’t died - are deducted from the other members (for eg. wife and children) in your medical aid’s “savings” account.

So in my dad’s case, he died in June.

According to Discovery, his MSA was depleted by then (we dispute this). Discovery will now recoup R4 512 (or R752 x 6 months) from my mum’s MSA leaving her with almost nothing for the rest of the year. Apparently, if there are no surviving members they go after your estate to recoup it.

So here is my question: How many people apart from estate attorneys and insurance brokers know this? Has any other ordinary person every been told this at the time of signing up for the insurance?

Here are my issues with it: It turns out that medical aids treat somebody’s death in the same way as had that person voluntarily withdrawn from the scheme or joined another scheme. In those cases, I completely understand why you would recoup the money.

But surely if someone dies, that is a different case?

Especially if it’s an elderly person who had been paying their premiums for decades (more than 40 years in my parent’s case). Surely then the insurance industry can write off R 4500? Instead, they then penalise the surviving (and mourning) spouse who is often also elderly and in need of medical care.

In 2018, it was estimated that the medical insurance industry was withholding in excess of R60 billion - way above the mandatory 25% that they are legally required to keep in reserve.

SURELY writing off these tiny amounts of specifically pensioners’ “debt”, will not affect the profitability of the industry in any major way? (After all, if Discovery can pay the reported R23.3 million per month in rent for their new offices in Sandton they won’t miss my dad’s R4 500?)

Let’s see if any of the medical aids can find it in their hearts to lead the way on this and change their rules.

In the meantime you have been warned: if you have medical insurance and land in the emergency department, make sure to check that you have been formally admitted before you breathe your last breath and of course make sure that it is December!