You’ve heard about gap cover but you might still be wondering why you would need it if you are already a member of a medical aid.
In this article, we discuss gap cover and everything you need to know about it, including what it is and why it could be a smart financial decision to make for you and your family.
Essentially, gap cover (GC) is a type of medical insurance, separate to medical aid, which serves to cover the monetary gap between your medical aid’s tariffs and the rates charged by private healthcare professionals.
Healthcare providers are not governed by a universal pricing structure and are free to charge any amount for the services they provide.
Therefore, in 2011, medical schemes developed a structure of tariffs related to healthcare services which form a guideline for the reimbursement of these services.
These are known as medical scheme tariffs (MSTs) and, combined with your medical aid plan, these tariffs will determine to what degree your medical bills will be covered by your medical aid.
With the ever-widening gap between MSTs and healthcare costs, you are always faced with the risk of having to pay the balance between the two, known as co-payments, out of your own pocket.
When it comes to private hospital care, these co-payments can be extremely high and financially debilitating, especially when you are not prepared for them.
Sudden illness, car accidents or emergency procedures are all reasons for being faced with unexpected medical bills.
In addition, some medical aids in South Africa require their members to make mandatory co-payments for certain medical treatments as well as when out-of-network providers are used.
Enter gap cover. Some of the top-tier GC products offer coverage for up to 500% of the MST. Furthermore, they may also cover unexpected (or expected) co-payments for hospital admissions, certain procedures and medical scans.
In addition, depending on the type of GC product you have selected, you may also qualify for lump sum benefits which can be used to cover costs for cancer treatment, accidental dentistry procedures and internal prostheses (joint replacements, valves etc).
In order to be eligible for gap cover in South Africa, you need to be younger than 60 years and an existing member of a South African medical aid scheme.
The benefits provided by GC extend to your children up to a certain age, as well as your spouse but only if they are registered dependants on your medical aid.
It’s important to understand that there are limitations to GC. However, these limitations are minor and mostly reasonable:
Generally speaking, there is a waiting period of 3 months after you have purchased GC. For individuals with pre-existing conditions, the waiting period is 12 months. You and your family will not be covered during these waiting periods.
Exclusions are treatments or procedures that are not covered by your GC benefits. These exclusions vary according to your GC provider but typically include:
The current annual limit for GC benefits is R157 000. Once that amount has been reached, you will have no further cover until the new year begins.
In addition, your GC also has a maximum rate at which it will cover your medical costs. Therefore, if your GC provides cover for 500% of the MST, and your specialist charges 800%, you will be liable for the 300% shortfall.
GC works in conjunction with your current medical aid and for that reason, it will not provide cover for any procedure that your medical aid does not provide cover for. It only serves to cover the shortfall on approved procedures, medications and specialist visits.
With rising medical costs in South Africa, there are few medical aids which provide full cover and the result is exorbitant out-of-pocket fees and major shortfalls between MSTs and service provider fees.
With gap cover, you and your family can enjoy extended coverage, ensuring that you are not faced with debilitating co-payments or costs that you are not financially prepared for.
As part of your financial planning, allow our financial advisors to assist you with selecting the right gap cover so that you and your family receive the necessary treatment without suffering financially. Contact us.
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