Discovery Health’s notification regarding the ConCourt ruling on Medical Savings Accounts

This is what Discovery Health have notified regards the Constitutional Court ruling regarding medical Savings accounts

The post about this Constitutional Court ruling, can be read here.

What follows is the notification that Discovery Health released yesterday:

Constitutional Court judgement: Genesis Medical Scheme

On Tuesday, 6 June 2017, the Constitutional Court ruled on the matter of Genesis Medical Scheme versus the Registrar of Medical Schemes and the Council for Medical Schemes. The judgement found in favour of Genesis Medical Scheme, ruling that funds accumulated in members’ medical savings accounts (MSA) can be considered as part of the Scheme’s reserves.

The judgement has three main implications for schemes and their members. The judgement will have a positive impact on scheme solvency particularly where schemes have large amounts of MSA funds. This is because the MSA funds can now be counted as assets in the solvency calculation. The judgement may also have a positive impact on scheme investment returns, because schemes may now be able to invest some of the MSA funds in higher returning investments. Both these developments will be positive for scheme members since they will reduce pressure on premium increases to some extent.

The judgement also allows schemes to elect whether to pay interest on positive MSA balances. Discovery Health Medical Scheme will continue to pay market-related interest on members’ MSA funds until further notice.

The judgement has no impact on how members’ day-to-day claims are processed from their MSA, though. Medical schemes will continue to refund members who have a positive balance in their MSA if they leave the scheme.

In theory, the judgement implies that if a scheme is liquidated, funds in members’ MSAs would form part of the liquidation and would not be available to members. Members of Discovery Health Medical Scheme should rest assured that they face absolutely no risk from this change. Discovery Health Medical Scheme is currently in an extremely strong financial position, and is by far the strongest medical scheme in the country. The Scheme has accumulated reserves of R14.2 billion and a solvency level of 26.3%, well above the statutory level of 25%. Global Credit Ratings recently reaffirmed the credit rating of the Scheme as AA+, the highest rating possible for an open scheme in South Africa. Discovery Health Medical Scheme remains the only open scheme in South Africa to achieve this credit rating and has sustained this rating for 15 years in a row.

Excerpted from eDiscoverer sent 22.06.2017

So, please note that there is nothing to be worried about, in fact if increases can be relaxed slightly … all the better.

Discovery Health’s notification regarding the ConCourt ruling on Medical Savings Accounts was last modified: June 23rd, 2017 by Kenny Williamson

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