Mind the gap

While medical schemes pay up to 100% of their own medical scheme tariffs, medical practitioners can charge up to 600% of these amounts.

This is where gap cover comes into play. Due to the fact that medical specialists’ fees are not regulated in South Africa, medical schemes have placed an upper limit on the amount that they are willing to cover. Gap cover is a short-term insurance product, available to medical scheme members, that cover mainly in-hospital shortfalls in the difference between what hospitals, doctors or specialists charge, and the rate that a medical scheme is willing to pay.

Gap cover is different from top-up cover, which covers payments after medical scheme benefits have been exhausted, and hospital cash plans, which pays out a set amount for each day of hospitalisation of the insured. Costs applicable to gap cover ranges from as little as R200 per month to as much as R800 per month, depending on the nature of the cover required.

The Department of Health and National Treasury published demarcation regulations defining the roles of medical schemes and insurance products in December 2016. These regulations prescribe a three-month general waiting period, and a 12-month condition-specific waiting period with pre-existing conditions. The maximum age of 60 years for coverage by insurers who offer gap cover has been scrapped. A maximum gap cover limit of R157 000 per member per year was also introduced. This amount is currently set at R175 000.

Under the regulations medical scheme members who move between medical schemes will not be subject to additional waiting periods for gap cover benefits, on the condition that the service provider is notified of the change. Members can also change their gap cover to align with the benefits provided by the new medical scheme.

Gap cover offers cover in addition to things that a medical scheme would normally pay for. If you had an emergency visit to the ER and you have a medical scheme with a Medical Savings Account, you would be able to claim this visit from your savings. On many of the cover plans available, you will then be able to claim a reimbursement for this event. This would also apply for out-patient procedures such as MRIs, CT scans, chemo, radiotherapy and kidney dialysis.

If you have a hospital plan, many out-of-hospital benefits won’t be covered as these plans only cover you for procedures when you are admitted to hospital. Out-of-hospital, day-to-day and chronic medication shortfalls, ward and theatre fees (hospital account), appliances, disposables or day-to-day GP and specialist visits, are not covered by gap cover products. Cover for mental health treatment is limited and cosmetic procedures are excluded from gap cover.

Gap cover is suitable for all medical scheme members who do not want to risk having to cover a partial payment of the amounts charged by medical service providers.

The information contained in this article is of a general nature and intended for information purposes only. It is neither to be construed as financial advice nor to be regarded as a definitive analysis of any financial, legal or other issue. Individuals must not rely on this information to make a financial or investment decision. Before making any decision, we recommend you consult your financial planner/advisor to take into account your particular investment objectives, financial situation and individual needs.