If you have just joined a medical aid for the first time you may have noticed that you are being charged a late joiner penalty but what does this mean exactly? A late joiner penalty applies to those joining a medical aid for the first time and are over the age of 35 as well as to those who have not been part of a medical aid for a certain period of time. South African law states that a medical aid may not turn someone away from joining, however they may impose additional charges onto your monthly fees for as long as you are a member of the scheme.

Why is there a late joiner penalty fee?

Simply put, these fees have been put in place in order to protect medical aid providers from increased claims by new members. It is also treated as an incentive to encourage people to join a medical aid from a younger age. People who join a medical aid over the age of 35 are not in the same health bracket as those who are 18 and will probably have a higher volume of claims for the medical aid. Also, some people tend to only join medical aids once a medical emergency arises meaning higher monetary claims against the medical aid provider. Medical aids consider late joiners more risky which is why they add the extra fee.

How are these fees calculated?

How the late joiner penalty is calculated is part of legislation and is therefore consistent across all medical aids. This means that you won’t have to shop around for the best or lowest late joiner penalty fees.

The basic equation to determine what your penalty fee will be is:

Age upon application minus (35 years + years of previous cover) = Total years uncovered.

The number of years uncovered corresponds to a percentage on the following table, which is used to calculate the fee:

Total years uncovered Late-joiner fee
0-4 years 5% of contribution
5-14 years 25% of contribution
15-24 years 50% of contribution
25 years or more 75% of contribution