It is no secret that private healthcare is expensive, and it keeps getting more and more costly. Medical insurance (medical aid) is the single biggest item in the consumer price index (CPI) inflation basket, taking up 7.6% of total household spending.
Medical aid schemes in South Africa reimburse doctors and specialists at 100%, 200%, or 300% of the scheme rate. However, professional medical providers may charge up to five times the base tariff.
It may come as a shock to realise that even if you are a member of a medical aid scheme, you could be faced with serious medical costs if you or a family member requires hospital treatment.
Gap Cover is a short-term insurance product that covers the difference between what your doctor or specialist charges and the amount your medical aid pays. Gap cover “closes the gap”, ensuring that you can afford the care that you and your family need.
If your medical aid plan covers 100% or 200%, it should be adequate for those doctors’ and specialists’ fees that aren’t charged above these percentages. But what about the healthcare providers who don’t charge medical aid rates?
Let’s say your medical aid plan covers up to 200% of the medical aid rate but your healthcare provider charges 400% of the medical aid rate… your medical will cover 200% and you’ll be liable for 200%.
Top-tier gap cover products offer in-hospital and specified out-patient benefits, up to 500% of the MST. In addition, they may cover co-payments related to hospital admissions, certain surgical procedures, and medical scans.
Many South African medical aid schemes require members to make co-payments if they use hospitals other than those in the scheme networks. With gap cover, this mandatory co-payment is covered up to a certain amount per family per year.
With suitable gap cover, you’ll also qualify for lump sum benefits to cover costs related to the medical treatment of certain cancers, internal prostheses, accidental dentistry and treatment and care in a casualty ward.
Who is eligible for gap cover?
Anyone who's a member of a registered South African medical aid scheme and who is 60 years of age or younger qualifies for gap cover.
Benefits extend to your spouse and dependent children up to a certain age, provided all members of your family belong to your medical scheme and the same medical aid plan or option.
Waiting periods and exclusions
As with conventional medical aid, waiting periods and exclusions apply to gap cover.
Typically, there’s a general waiting period of three months for all benefits, as well as a 12-month waiting period for pre-existing conditions. During these waiting periods, you and your family are not eligible for cover.
Exclusions refer to certain procedures and treatments that are not covered by gap cover benefits. These vary according to provider. Typical exclusions include obesity treatment, cosmetic surgery, and specialised dentistry.
Note that a gap cover provider may refuse to cover the costs of co-payments defined as percentages rather than rand amounts; claims that are older than six months; and any limit, co-payment, or penalty imposed on you by your medical aid scheme for non-compliance with scheme rules or authorisation procedures.
Speak to us if you would like our healthcare specialist to assist.
Author: Anton Schutte, General Manager and Financial Planner at the PWG Group.