The rising cost of private healthcare in South Africa cannot be met by medical aid or medical insurance. Often shortfalls arises, apart from co-payments. This means that medical aid members will have to pay for the shortfall from their own pockets after their medical scheme pays the provider. These shortfalls can run into the thousands or even tens of thousands of rands. Fortunately short term insurers identified the need for shortfall protection or top up cover and medical gap cover is now available to medical aid members.
What is Gap Cover?
Medical gap cover is a short term insurance product that offers protection against medical aid shortfalls. It is only available to members of a registered medical scheme as regulated by the Council of Medical Schemes, according to the Medical Schemes Act of 1998. Members of medical insurance or health insurance products do not qualify for gap cover. Most gap cover plans are offered by short term insurers who are independent of medical schemes. However, some medical schemes are now providing gap cover via subsidiary insurers for a convenient solution for its members.
Gap cover pays the shortfalls of medical aid, usually up to 500% of the scheme tariff. This means that the outstanding portion of the bill is covered by the gap cover insurer after the medical scheme pays according to their tariffs. In the past the patient was liable for the shortfall which could run into the thousands or even tens of thousands of rands, particularly for surgical procedures. With some service providers charging higher than medical scheme rates, gap cover is now a financial lifeline for medical aid members to afford private healthcare particularly specialist care and in-hospital care.
How Does Gap Cover Work
Medical aid funds the diagnosis, treatment and management of essential healthcare. The scheme pays according to specific tariffs for a medical condition. These tariffs are determined by medical schemes in consultation with service providers. However, there are service providers who charge above this medical aid tariff. Patients who receive care from practitioners that charge higher than medical aid rates will have to pay for the shortfall between what the doctor charges and the medical aid will pay according to its tariffs. It is not uncommon for some doctors, particularly medical specialists, to charge 300% of medical aid tariffs.
The medical scheme will only pay 100% of the medical aid tariff. The remaining 200%, which is the shortfall, has to covered by the patient. However, gap cover bridges this shortfall. A medical aid member who has gap cover can claim the shortfall amount from the insurer who will pay the member directly. This means that the patient is not out of pocket although some doctors do request upfront payment before a procedure. In this case neither the medical aid nor the gap cover insurer will pay towards the bill until after the treatment is concluded.
Gap cover is a single insurance policy that covers all members on the medical aid plan for one monthly premium. Previously gap cover insurers had a maximum entry age and age limit of 65 years so senior medical aid members did not qualify for cover. Many gap cover insurers now cover senior citizens who have medical aid although these senior gap cover plans tend to be more expensive. Gap cover is not mandatory for medical aid members. However, the rising cost of private healthcare in South Africa means that medical aid alone is not sufficient and gap cover can be helpful.