Good health care is not always easily obtainable and quickly becomes a costly experience. Many people who have health cover policies sometimes expect to have more cover than their policy actually includes, and they are saddled with high shortfall bills; they land up paying the difference between the medical cover rate, and the cost of the specialist.

This is because having medical aid doesn’t necessarily mean that you will be fully covered for all treatments. This is because, every year, medical aid providers establish a base rate that can be charged for all procedures, and your medical aid plan will pay a percentage of this rate. A good plan can pay up to 300%, but many specialists or private hospitals charge more than 300%, which can often result in a shortfall that needs to be covered. For example, if a surgeon charges 350% of the base rate and your medical aid covers 300%, you will end up with an additional 50% that needs to be paid.

What is gap cover?

Although small, adhoc amounts can be manageable if a non-urgent issue arises, an accident or the sudden onset of an illness can leave you with no time to save, and you can be left needing to cover a hefty shortfall.

To protect yourself in the event of an emergency, gap cover can be as important as medical cover. Gap cover could be considered as a top-up medical insurance that is designed to pay the difference (the gap) between what a private doctor charges and what your medical scheme pays.

You can only take out gap cover if you already have medical aid, but only one policy is usually required to cover a member and their dependants (as long as they are all on the same scheme with the same options). It can, therefore, work out very affordable if you have several dependants.

What is covered?

Although premiums can still be relatively cheap and benefits can be extensive, times are a-changing when it comes to gap cover, so it’s important to be aware of exactly what is covered. According to an article published on Fin 24, gap cover insurers have needed to curtail their expenditure to remain financially viable in the face of increasing private healthcare costs. After all, insurance schemes are run for profit, and gap cover is an insurance product that complies with the regulations of the Short-term and Long-term Insurance Acts, rather than those of the Medical Schemes Act of 1998.

Gap cover used to pay the difference between what your medical scheme paid and your total medical bill, which meant that even if you had the cheapest hospital plan, you would be covered in full if you had gap cover. However, this also meant that the largest share of medical costs often fell on the shoulders of gap cover providers, instead of medical schemes. Gap cover providers have been known to carry up to 80% of costs, and such heavy shortfalls have meant that full gap cover payment is no longer often sustainable in the long-term.

Consequently, many gap cover providers have introduced new calculations as to how much of the co-payment they will cover, through a match-pay system based on your medical scheme. Depending on your policy, some providers agree to pay up to five times what your medical scheme has paid, while others will only pay up to twice the amount. So, if your bill comes to ZAR20,000, of which your medical scheme will cover ZAR5,000, your gap cover will pay ZAR10,000 if it pays twice the medical scheme contribution. You will still then need to pay ZAR5,000 by yourself. It is, therefore, worth having a medical scheme that pays out as great a percentage as possible of the base tariff, as this will affect how much will be covered by your gap cover too.

It’s also important to note that gap cover will only cover the shortfall on approved specialists or procedures, so it won’t cover something that is excluded by your medical aid plan. Although having gap cover is still highly worthwhile, it’s best to ensure you are informed about what your gap cover policy will likely not pay for, such as upgrades to a private room, wheelchairs or crutches, and cosmetic procedures. Do also read the fine print because there could be some delicate nuances, such as dental treatment may be provided, but only in hospital.

Given all the exclusions and new calculations, it is important that you have a detailed understanding of what your medical aid covers and how your gap cover will work in conjunction with this. If you have any health concerns, the last thing you need to worry about is whether you can afford to receive the appropriate help, so it’s advisable to be as extensively covered as possible when it comes to medical treatment in South Africa. Don’t hesitate to arrange a meeting if you wish to discuss whether you can afford to put (or not put) your family on a gap cover plan.