Who pays my medical expenses when I am in a road accident?

The lengthy ongoing legal battle between Discovery Health and the Road Accident Fund (RAF) may leave you wondering who is liable for your medical costs if you are injured in a motor vehicle accident.

The Discovery Health case is confusing and unresolved, but in the meantime, the courts continue to issue judgments ordering the RAF to pay medical scheme members’ medical bills.

Where does this leave you if you are a medical scheme member injured in a motor vehicle accident?

The court cases highlight that the RAF is legally liable for your medical costs, and potentially lost income, when you are injured in a motor vehicle accident and unable to work.

However, as a scheme member you are also entitled to claim from your scheme and your scheme is most likely to pay your immediate costs and ensure you are admitted to a private hospital.

Schemes pay medical expenses immediately

Jaco Rupping, COO of Short-Term Insurance at ASI Insure, says medical schemes are often the first line of financial support for individuals injured in vehicle accidents. “Your medical scheme will cover immediate and ongoing medical treatment or care, for instance hospitalisation, surgery, and rehabilitation,” he says.

The RAF is an after-the-fact insurer, as it takes longer to claim, Rupping says. “Medical schemes will step in to ensure that treatment is not delayed due to funding concerns,” he says, while cases before the courts prove that RAF claims can take a long time

Dr Ron Whelan, chief executive officer of Discovery Health, says that your medical scheme will generally cover the cost of medical care associated with road accidents, particularly where this is an emergency.  

Schemes are obliged in terms of the Medical Schemes Act to cover all medical emergencies and a number of other listed serious conditions as prescribed minimum benefits (PMBs). Many scheme options also cover you for private hospital admissions.

What is the RAF and what does it do?

The RAF is a South African state-supported fund that provides compensation to victims of road accidents.

It is a form of compulsory social insurance funded by a fuel levy that everyone who puts petrol or diesel into their vehicles pays. The amount of the levy used to fund the RAF is determined annually in the National Budget. In the 2023/24 fiscal year, it was 218c a litre.

Last year, almost 80 000 claims were filed and just over 63 000 were finalised. However, the RAF admits that it hasn’t resolved all claims dating back several years. It says 90 percent of these have not been paid as a result of inadequate paperwork which it is attempting to resolve.

In addition, the fund has massive liabilities amounting to hundreds of millions of rands and recently lost a court battle with the attorney general to restate its liabilities to a fraction of this amount.

In an effort to fix the fund’s problems, more proposals have been put forward to limit claims from foreigners and wealthy individuals.

What will the RAF pay?

The RAF’s fact sheet lists the costs for which it will pay, or reimburse, claimants as long as they are not responsible for the accident: 

• Medical expenses which include emergency and non-emergency medical treatment, only in cases where the expenses have not been paid by your medical scheme;
  
  
• Past and future loss of earnings or income;
  
  
• Future medical expenses;
  
  
• General damages for serious injuries;
  
  
• Direct funeral expenses (excluding aspects such as catering);
  
  
• Past and future loss of support; and,
  
  
• Home modifications and caregivers if needed.

Recent court rulings show that if you are in any way to blame for your accident, the RAF will not pay all your costs.

Why are Discovery and the RAF arguing over medical costs

In one of the RAF’s recent attempts to limit its liabilities, it directed its staff in 2022 not to pay the medical claims of medical scheme members whose schemes had paid their medical bills.

Discovery Health succeeded in having this directive declared unlawful in 2023.

The RAF then issued a new directive to its employees not to pay medical costs that schemes are obliged to pay as prescribed minimum benefits (PMBs) or emergency medical conditions.

Discovery Health challenged this directive as being in contempt of the court order made against the first directive, but two out of three High Court judges ruled against the medical scheme administrator and the challenge was dismissed.

Discovery Health has been granted the right to appeal the judgment, and the appeal has yet to be heard.

Despite this, in January this year, the RAF was ordered to pay medical costs incurred by Rahldeyah Esack to his estate even though Esack’s medical expenses relating to an accident in 2015 were paid by Discovery Health Medical Scheme.

Most recently, in March, the RAF was ordered to pay the medical costs of John Moss, a cyclist and medical scheme member who was hit by a vehicle in 2017.

The scheme's view

Whelan said Discovery Health went to court to stop both the RAF and the Minister of Transport from implementing these directives not only on behalf of the schemes it administers, but also “in the interests of all medical scheme members in South Africa”.

“Discovery Health’s firm contention is that medical scheme members’ valid road accident-related medical claims must be processed and paid by the RAF, on the same basis as for any other eligible claimant – as has been the case for the past eighty years,” Whelan says.

Whelan said there are two reasons why some medical schemes, such as Discovery Health Medical Scheme, want members to claim medical costs from the RAF and repay the scheme:

• It ensures that individuals do not benefit from being refunded for medical expenses which they did not actually pay in the first place.
  
  
• The cost of medical schemes is kept as low as possible. Model rules published by the Council for Medical Schemes mean that expenses that can be recovered from other parties are not paid for by the scheme.

“Where these medical claims, which have been paid by the medical scheme, are settled by the RAF, they are refunded to the medical scheme. This protects members from higher medical scheme contribution increases,” Whelan says.

Some medical schemes have taken a different approach. The Government Employees Medical Scheme, for example, does not expect members to claim accident-related medical expenses from the RAF.

Are scheme members expected to claim from the RAF?

Whelan said that, as the process of claiming back from the RAF can take between four and five years on average, Discovery helps members claim these costs back from the RAF. He provided the following bullet-pointed explainer:

In terms of the registered rules of the Discovery Health Medical Scheme, members who have lodged a claim against the RAF must:

• Inform the scheme of such claim;
  
  
• Include the scheme’s accident-related medical expenses in the claim against the RAF;
  
  
• Promptly reimburse the scheme with any payment made by the RAF in respect of accident-related medical expenses which were paid by the Scheme; and
  
  
• Inform the scheme of any undertaking made by the RAF in respect of future accident-related medical expenses.