08/10/2025
SIZWE HOSMED UNDER PROVISIONAL CURATORSHIP:
On August 2025 Sizwe Hosmed was placed under Provisional Curatorship since there solvency levels has continued to decline to below the regulated 25% according to the CMS. In the case where solvency levels falls below 25% the medicals cheme has to submit business plans to the CMS as necessary pre determined plan how to rectify the situation.
The reason for the the Provisional Curatorship is because of the fact that Sizwe Hosmed already submitted three business plans on 10 February 2023, 28 April 2023 and 10 October 2023 respectively, that were rejected dua to inadequate information and inaccurate forecasts and assumptions compared to the actual experience. The fourth business plan was submitted on 23 September 2024 after the scheme has changed there actuaries and finally approved on 4 December 2024.
The scheme was placed under Statutory Management effective 11 July 2024 that provided regular reports to the CMS. The Statutory Manager's report August 2025 dated 15 August 2025, concluded that the Scheme was facing severe financial and operational distress, marked by critical solvency issues, regulatory non-compliance, member losses and unstable claims.
Solvency levels for June and July 2025 were only 5.6% and 6.62% respectively.
In order to protect the best interests of beneficiaries, the CMS had to act swiftly and brought the curatorship application on an urgent basis. The Curator will replace the whole Board of Trustees and will work under the direction of the CMS.
WHERE DOES THIS LEAVE EXISTING MEMBERS?
Experience dictates that in most instances rumours on social media of Financial and Operational distress of a Medical Scheme will firstly lead to an uncontrolled outflow of young and healthy members to alternative medical schemes that will negatively impact the claims ratio of the scheme. Normally the young and healthy low claimer members will subsidise older higher claimer members. Secondly, service providers may reject service to members of the applicable scheme and also may implement a cash and claim back policy because of the financial risk to them for unpaid claims . Members may also experience (without prior notice) that hospital authorisations are processed differently than those of other medical schemes.
Unfortunately, when younger members and families decides to leave the medical scheme the older high claimer members with chronic conditions and expensive treatment plans are left on the scheme. The reason for this is because of the fact that underwriting will be imposed e.g. waiting periods and lifelong Late Joiners Penalties (LJP) when they move from Sizwe Hosmed to any other open medical scheme.
WHAT ADVISE WILL I GIVE TO THESE MEMBERS?
1. Do NOT cancel your membership with Sizwe Hosmed especially since the scheme was placed under Provisional Curatorship by the CMS to try and MANAGE THE SCHEME OUT OF FINANCIAL DISTRESS and also to benefit beneficiaries. When you cancel you will put yourself and your dependants at risk during when a individual underwriting are imposed with waiting periods and where you may have an extra financial burden when lifelong LJP's are imposed. I'll advise that you wait and see what positive results will come from this. Please do not listen to over eager Brokers who are not taking you and your family's wellbeing to heart and are only interested in the commission they may receive.
2. Normally, in the case where the approved Statutory Manager will not be able to manage Sizwe Hosmed out of Financial distress, the Council of Medical Schemes (CMS) will get involved with a possible amalgamation/s with other open medical schemes who will be willing to accept the remaining Sizwe Hosmed members with the risk involved. In this case the new medical scheme may decide to accept all remaining Sizwe Hosmed members without underwriting e.g. waiting period etc. that will benefit all remaining members. Members will then migrate to the available options on the new scheme and all treatment plans will be accepted and can be registered on the new plan.
In another possible scenario were no open medical schemes is willing to accept all the remaining Sizwe Hosmed members because of the possible claims risk involve, one or more open may provide a Window Period where remaining member's can join within a predetermined period. It will be difficult to predict what underwriting may be imposed by each individual medical scheme. In both cases the CMS will see to it that the wellbeing of Sizwe Hosmed's members are high priority.
3. In the case where you have children or young adults on your Sizwe Hosmed membership I will advise you to de-register them to apply as principal members to any other open medical scheme that will suit there needs. The reason for this advise is because of the fact that medical schemes will in most instances accept young and healthy members WITHOUT any waiting periods.
WHAT IS UNDERWRITING?
When moving between open medical schemes members are underwritten according to Catagory A,B or C. Mostly older members on Sizwe Hosmed will be Catagory C, meaning that they have been members of the scheme for longer than 24 months without a lapse of membership of more that 90 days. Lifelong LJP's are imposed on the bases of years without membership to a registered SA medical scheme backdated to age 35. The percentage imposed will be the amount of years without membership and are individually imposed e.g.
- 0-4 years=5%
- 5-14 years=25%
- 15-24 years=50%
- 24+ years=75%
For any information or advise please call Dr. Pikkie Kok at 018 4687402 or 082 226 5981
