Late Joiner Penalty and medical aid: what you need to know (2024)

A late joiner penalty (LJP) is a permanent penalty of 5% -75% paid by some medical aid members who are over 35 years old. Not everyone over 35yrs pays this penalty!

The LPJ was put in place to encourage potential medical members to join a medical aid while they are still young, and presumably more healthy than they will be at an older age. If it wasn’t for the penalty, healthy people would only join a medical aid when they need it, and this is not sustainable for the medical aid funds.

How is this penalty calculated?

You’ll need a pen and paper, and possibly a calculator. We include many examples below, to help you work it out correctly.

Apply the Penalty Band to the table below:

Penalty Band: Contribution:
1-4 Risk Premium+5%+Savings Contribution (if any)
5-14 Risk Premium+25%+Savings Contribution (if any)
15-24 Premium+50%+Savings Contribution (if any)
25+ Premium+75%+Savings Contribution (if any)

Examples:

What is “credible cover”?

Credible past cover” is any past membership of a South African medical aid scheme.

I had medical cover overseas. Does that count as past cover?

I had medical insurance. Does that count?

No, although we have heard that some schemes do make exceptions for Primary Health Products that are under their umbrella.

Note:

Bonus Tip: How to save on your LJP

If there are two adults on your plan, make sure that the one with the highest LJP is the dependant, not the main member. Their premium will be lower, and thus the penalty will be lower too.

Don’t forget about waiting periods!

If you wait to join a medical aid only when you are ill, you will probably have have a waiting period applied. It could be as long as 12 months.

Who does NOT have to pay?

You definitely don’t have to pay a late joiner penalty if…

It is also possible that if you join through your employer group (and not individually) that the late joiner penalty is “forgiven”. This is employer-group dependant though. You’d have to speak to your HR for the details.

I’m over 35 with no medical aid. Do I have to pay the Late Joiner Penalty?

If you were a member of a medical aid from the age of 21, even if you eventually cancelled your membership, all the membership years count as “credit” if you are 35yrs+. See above formula for more details.

How long do I have to pay the Late Joiner Penalty (LPJ)?

An LPJ is forever, and will likely follow you when you change plans and schemes.

I am a medical aid member, not paying an LPJ. Will I pay one if I change schemes?

It’s possible, but unlikely. Work out the formula above, just to make sure.