MEDICAL AID INSURANCE
Please view the following question and answer regarding medical aid. Is the fatwa issued by Darul Uloom Isipingo correct?
The shar’ee ruling regarding medical aid and hospital plan
Q: I recently read an article which claims that it is permissible for a Muslim to take out a medical aid contract. The article explained that if a stipulated monthly fee is paid to the medical aid company in return for which they assume responsibility for the client’s hospitalization or medical expenses, it will be permissible.
The reason for this medical aid contract being permissible in Shari’ah is that it is regarded as an ijaarah contract (i.e. hiring of services) between the member and the medical aid scheme. The ijaarah works in this manner that the member pays a fixed and mutually agreed amount monthly, and in exchange, the scheme takes responsibility for his treatment and wellbeing.
The article also stated that the medical aid scheme can be compared to hiring the services of a barber and a wet nurse. In many villages of India, it is a common and well-known practice for a family to give the barber a stipulated amount of grain or cash at the time of harvest. In exchange, the barber takes responsibility to cut the hair of the family whenever they wish during the year. In this case, although the number of haircuts that he will give to the family is unknown, this ambiguity is tolerated and overlooked as it does not lead to any dispute.
Similarly, the medical aid scheme can be compared to hiring the services of a wet nurse who is paid a fee for breastfeeding the child. In this case, the amount of milk and the number of times the wet nurse will feed the child is unknown. Despite this being unknown, the ambiguity is tolerated and overlooked as it does not lead to any dispute.
Accordingly, just as it is permissible to hire the services of the barber and the wet nurse, similarly it is permissible to hire the service of a medical aid scheme which takes responsibility to provide medical treatment whenever one requires.
Another example cited in the article was that of an armed response security company. A person pays the security company a monthly fee for the service of armed response. However, he is not certain as to whether he will require the armed response or not. Similarly, the number of times that he will require the armed response is not known. However, this ambiguity is tolerated as it does not lead to any dispute.
The article states that the only difference between a medical aid scheme and a barber, wet nurse or an armed response security company, is that the barber, wet nurse and armed response company provide the service themselves, while the medical aid company does not provide the service of medical treatment itself, but rather pays a third party to provide the service.
Based on the above arguments, is it permissible for a Muslim to take out a medical aid contract?
A: In order to correctly understand the issue in question, and to determine whether it is correct to regard a medical aid scheme as an ijaarah contract (a hire of service), we will first have to gain an understanding of the different forms of hiring services that have been recognized by Shari’ah. In this regard, Shari’ah essentially recognizes two types of ajeers (people hired to render services). The first is the ajeer-e-khaas and the second is the ajeer-e-mushtarak. Below we will present a brief explanation of both types of ajeers and the laws which relate to them.
An ajeer-e-khaas refers to a person who is paid to avail himself for a fixed duration of time in which he will render his services. Since the ajeer-e-khaas is remunerated for his time, it is not permissible for him to hire his service to anyone else during the hours of his employment.
An example of an ajeer-e-khaas is that of a worker who is paid to avail himself for a stipulated amount of time. For example, he is employed from 8am to 4pm on six days of the week for a stipulated wage. Hence, if he avails himself for the full duration of his employment, he will be entitled to receive a full wage.
Ajeer-e-mushtarak refers to a person who is hired to render a specific service. Since he is not being paid for his time, but is rather paid to render a service, he will only be entitled to receive his fee when the service has been rendered. Similarly, since he is not being paid for his time, he can accept jobs from multiple parties simultaneously.
An example of an ajeer-e- mushtarak is that of a tailor. The tailor is hired to render the service of sewing a garment for which his fee is R400. Hence, whether the tailor sews the garment in one day, one week or one month, he will only be entitled to receive R400, as he is being remunerated for his service and not his time. Similarly, it will be permissible for the tailor to accept jobs from multiple customers simultaneously.
From the above prelude, we understand that in order for one to be regarded as an ajeer-e-khaas, he will have to avail himself during the period of employment, and during this period, he cannot avail his services to other people. However, this is not the case with an ajeer-e-mushtarak, as an ajeer-e-mushtarak can hire out his services to multiple people simultaneously.
Which Category of Ajeer do Medical Aid Schemes Fall Under?
After analysing medical aid schemes, one will understand that they do not fall under any of the two categories of ajeers.
Medical aid schemes do not fall in the category of ajeer-e-khaas because they are not paid to avail themselves to their clients for a stipulated period of time.
Similarly, they do not fall under the category of ajeer-e-mushtarak as they do not render any service to the client. They are not healthcare professionals (doctors, etc.) nor are they a hospital. A person can only be categorised as an ajeer-e-mushtarak if he is providing a service to the one who hired him. Since the medical aid company is not providing any service, they cannot be regarded as an ajeer-e-mushtarak.
In essence, it is incorrect to regard a medical aid scheme to be the hire of a service.
The Reality of Medical Aid
At this juncture, the question will arise that if a medical aid scheme is not the hire of a service, then what type of contract is it?
In a medical aid scheme, we find that one pays the medical aid company a fixed monthly premium in exchange of them undertaking to fulfil one’s liability. Thereafter, when the client requires medical treatment, he will go to a doctor or hospital. After receiving the required treatment, the medical aid company will remunerate the doctor or hospital on their client’s behalf.
Thus, after examining the medical aid scheme, it is clear that their operations are actually identical to that of an insurance company.
Insurance is haraam in Islam due to the elements of interest and gambling being found in it. One is uncertain as to whether one will be hijacked or meet in an accident or one’s house or business will be burgled in the future or not. Any transaction wherein one pays for something which is suspended upon an uncertain event is in actual fact gambling. This is the definition of gambling according to all the Ulamaa. In the case of gambling, one spends a certain amount of money in the hope of gaining something which is uncertain. One might lose all one’s money and get nothing or one might get something more or less than what one had spent. Hence, we see the element of gambling found in an insurance policy. Further, if one receives the insurance payout and one is paid more than the amount one had paid to the insurance company, then in this case the extra amount one has received is riba (interest). Hence taking out an insurance policy is impermissible in Shari’ah.
As far as the medical aid scheme is concerned, we find these two elements glaringly found in it. One does not know when one will fall ill and require treatment, and in the case where one requires treatment, one might receive more or less than the amount one had spent in premiums to the medical aid scheme. Hence, on account of the elements of qimaar (gambling) and riba (interest), the medical aid scheme is declared haraam in Shar’iah. There are severe warnings in the Quraan Majeed and Hadith for those who get involved in the grave sin of gambling and interest.
The Comparison to a Barber, Wet Nurse or Armed Response Security Company that are Paid a Monthly Amount
The argument tendered that medical aid schemes can be compared to a barber, wet nurse or an armed response security company that are paid a fixed monthly fee, is incorrect. The reason is that there is a vital and fundamental difference between a medical aid company and a barber, wet nurse or armed response company.
The difference is that the money which the barber, wet nurse and armed response company receive is in lieu of a service that they themselves will render. In the case of the barber, he or one of his staff will carry out the service of giving a haircut. Similarly, in the case of the wet nurse, she herself will breastfeed the child. Likewise, in the case of the armed response company, they themselves provide the service of the armed response.
As for the medical aid company, they are not providing any service. Rather, the medical aid company merely suffices on settling the medical bills of their clients. In essence, they are accepting money to give money. It is for this reason that medical aid companies cannot be compared to a barber, wet nurse or armed response security company.
Can We regard the Medical Aid Company as a Wakeel (Agent) to Stand Responsible to arrange Medical Treatment?
If someone argues that although the medical aid company is not providing any treatment to their customers, they are standing responsible to arrange medical treatment of the client. Thereafter, when the client requires treatment, they subcontract the service of doctors, hospitals, etc. In other words, they are taking payment to arrange treatment for their clients when required, and to thereafter pay the doctors and hospitals for the treatment.
This brings us to the question of whether one can appoint a person and continue to pay him monthly premiums to stand responsible for any needs that he has in the future.
The answer to this question is that this is regarded as a wakaalat (appointing someone to carry out a specific task for a fee). However, in order for this wakaalat to be valid in Shari’ah, it is necessary for the wakeel (medical aid company) to do the work for which they are appointed, and for a fixed fee to be stipulated for every separate job that they carry out. In this case, since the patient himself independently seeks treatment from the doctor or hospital, and the medical aid company is not doing any work besides authorising payment and settling the bills, the medical aid company cannot be regarded as a wakeel for the client. It is for this reason we find that if the medical aid does not pay, the doctor or hospital will hold the client liable as the client was the one who hired their service.
Apart from this, a wakeel (agent) only deserves a set fee for the set service that he is appointed for. Hence, for them to charge the client monthly premiums on an on-going basis to merely remain on standby is not a recognised service in Shari’ah that will entitle them to a fee. Accordingly, this wakaalat is baatil (null and void).
In reality, the medical aid scheme or hospital plan is only given a medical name but is a contract of money for money where the medical aid company is on standby to pay bills and this is no different to insurance. Hence, according to all the four mazhabs, this contract is baatil on account of the elements of riba and qimaar being found in it.
If one wishes to enter into a halaal contract whereby one receives medical treatment at the time of need, then the Shar’ee solution is for one to directly pay a hospital a monthly fee for providing their service. Thereafter, whenever one falls ill, the hospital itself, in lieu of the money taken, will treat the patient. In this situation, since the hospital itself is providing the service, it will be permissible as this contract is a contract of money in exchange of service, and not a contract of money for money, as is the case of the present-day medical aid schemes and hospital plans.
And Allah Ta’ala knows best.
The answer on the issue of medical plans is correct. We have explained medical aid insurance in detail in two books which are available on our website. Hardcopies are also available.
The only error in the fatwa is the suggested ‘Shar’i solution’. Firstly, currently no hospital has any such plan as suggested by Isipingo’s Mufti.
Secondly, if we imagine that there is such a hospital plan, the hospital will be compelled by law to put the millions of rand in a trust account where the banks will pay interest. And, this is haraam.
Thirdly, the very same element of maisar (gambling) is attendant to the suggested hospital plan. The healthy client will be making monthly installments to the hospital on the very same basis that he pays premiums to a medical aid scheme. The monthly payment will be made on the basis of assumed future sickness, and this element reduces the suggested plan to a pure insurance scheme.
Fourthly, what is the Shar’i status of the money paid to the hospital? In the event of the client requiring medical service, the money given to the hospital will be in lieu of the service. But this is exactly the same as the benefit provided by a conventional insurance company. The service/benefit is hinged on a future uncertain event which may or may not transpire, and this is maisar (gambling) according to the Shariah.
In the event that the client never requires the service of the hospital, then in terms of the law as it stands presently, the money will belong to the hospital as is the case with all medical insurance schemes whereas in terms of the Shariah, the money will be the inheritance of the heirs of the deceased who had died without ever acquiring the service of the hospital. The money is in the category of Amaanat which obviously the hospital does not recognize.
Fifthly, in view of the money deposited with the hospital being Amaanat, the client has the right at all times of withdrawing his money from the hospital. But, there is no such hospital scheme which complies with the rules of the Shariah. Hence, the solution suggested by Isipingo is unrealistic, not workable in terms of the Shariah, and not permissible.
From the Shariah’s perspective, the answer for the exorbitant, haraam, satanic fees charged by the medical fraternity, is to save and to have trust (Tawakkul) on Allah Ta’ala. People pay high premiums monthly to the medical insurance schemes. Instead of contracting with the haraam medical insurance schemers, they should put the monthly installments in a savings account, have trust on Allah Ta’ala and make dua for aafiyat (safety). Allah Ta’ala will then take care.
However, the shaitaani attitude of Muslims today is total lack of Tawakkul. They have shifted tawakkul from Allah Ta’ala to tawakkul on kuffaar schemes, hence Allah Ta’ala involves them in their own preconceived future medical crises.
As for the poor, if the Zakaat-payers honestly and correctly discharge their Zakaat obligations, there will be ample funds to cater for the medical needs of the poor.
The demand of the Shariah is that Muslims reform themselves and rectify their bond with Allah Ta’ala. Only then will there be solutions for all their problems. Rasulullah (Sallallahu alayhi wasallam) said:
“Whatever is by Allah is obtainable only by means of obedience (to Allah Ta’ala).”
20 RabiulAwwal 1441 -18 November 2019