Your gap cover questions answered

Gap cover can play an important role in your overall healthcare portfolio as it provides an additional layer of protection against high-cost, unforeseeable medical expenses that would otherwise be difficult to afford. If you have questions about gap cover and are unsure whether to incorporate this type of cover into your portfolio, you may find the answers to these frequently asked questions insightful.

What is gap cover?

In its simplest form, gap cover is supplementary insurance that helps medical aid members bridge the financial gap between what is charged by medical professionals in hospital and the amount reimbursed by the medical aid. Service providers can charge way in excess of the medical aid tariff and the difference – i.e. the gap – can be unaffordable for the average person. As such, gap cover is designed to provide financial protection against such unexpected medical costs.

Is gap cover an insurance or medical aid benefit?

Whereas medical aids are regulated by the Medical Schemes Act, gap cover is short-term insurance product which, together with your medical aid, provides top-up health cover up to certain limits. By design, its role is to provide additional financial protection to medical scheme members who receive in-hospital treatment and care so that they are not saddled with large out-of-pocket expenses following a hospital event.

Who is eligible for gap cover?

Anyone who is a member of a registered medical scheme in South Africa is eligible to apply for gap cover although it is important to keep in mind that some gap cover providers apply age limits for membership. Many gap cover providers structure their premiums according to the age of the member, using age brackets of 55 and younger, 56 – 64 years, and 65 years plus – with the oldest age group paying considerably higher premiums as a result of the greater risk they pose. Some gap cover policies are restricted to members of certain medical schemes only, while others are open to members of any medical scheme. In addition, gap cover policies range from entry-level, nominally-priced cover to comprehensive options with a vast array of additional benefits and, as such, the premiums will depend largely on your age and the type of benefits you choose.

How much does gap cover pay out?

The cover provided by your gap cover benefit will depend on the level of cover you opt for, which can range from 200% to 600% of medical aid tariff. Most gap cover providers offer a range of options depending on your needs. As such, it’s important that you fully understand your medical aid benefits before selecting a gap cover option to ensure that you’re not paying for cover that you don’t need.

Does gap cover only cover treatment by in-hospital doctors and specialists?

Whereas gap cover was initially designed to cover the difference between the amount charged by doctors and specialists in hospital and the amount covered by medical aid, gap cover has subsequently evolved so as to provide cover for a range of enhanced benefits. For instance, some gap cover policies cover the costs of upfront hospital co-payments, outpatient kidney dialysis, and procedures performed in day clinics. Many gap cover providers offer once-off lump-sum benefits if diagnosed with cancer or a heart condition, if the member accesses casualty or trauma, or in respect of internal prostheses such as a knee replacement. Other useful benefits to look out for include lump sum cover for accidental injury or death, accidental dentistry cover, and cover for medical treatment received when travelling internationally. Scopes and scans, which are normally performed on an outpatient basis, can be high-cost and, as such, many gap cover policies provide benefits for these, so it is important to determine whether your policy offers such benefits, specifically MRI and CT scans which can be very expensive.

Are there any waiting periods when joining?

Yes, most gap cover providers apply a general waiting period of three months before a member can claim benefits, plus a 12-month waiting period for pre-existing conditions, which includes pregnancy. Therefore, if you are contemplating falling pregnant it is always a good idea to take out a gap cover policy in advance to ensure that your pregnancy and subsequent childbirth are not excluded from benefits.

Are any procedures or treatments excluded from cover?

Exclusions refer to certain procedures and treatments which will not be covered by your gap cover, such as elective cosmetic surgery, specialised dentistry, external prostheses, obesity and bariatric surgery, sleeping disorders, stem cell harvesting or treatment, or attempted suicide. Your gap cover provider should provide you with a detailed list of these exclusions in advance so that you are aware of what treatments and procedures you cannot claim for.

What should I look for when choosing a gap cover policy?

When looking for a gap cover policy, consider the following:

  • Benefits: Consider the benefits provided by the policy in relation to your medical aid. For instance, if your medical aid covers hospitalisation at 200% of medical aid tariff, you will want to consider a gap cover policy that pays in excess of this.
  • Affordability: While gap cover policies are generally fairly cost-effective, give consideration to what you can realistically afford to spend. Naturally, it makes sense to look for the most comprehensive cover at the most affordable premium. Premiums can differ dramatically from product to product, so do your research.
  • Waiting periods: There are a number of gap cover providers who do not impose general waiting periods, so be sure to do your research. That said, the absence of waiting periods should not be a deciding factor in making your selection.
  • Provider networks: You may want to check whether your gap cover policy restricts you to a specific network of hospitals or doctors as this may restrict your options.

As a top-up healthcare benefit, your gap cover should not be viewed in isolation but rather as part of your overall medical risk portfolio. Your medical aid, disability and dread disease cover all play a role in protecting you financially against unforeseeable healthcare costs, so it’s important to consider all benefits and policies before making your decision. The first step should be to determine exactly what in-hospital benefits are offered by your medical aid, and then look for a gap cover policy that compliments this cover by addressing those shortfalls. Keep in mind, however, that your gap cover is not designed to cover treatment for Prescribed Minimum Benefits (PMB) as these costs must by law be covered by your medical aid. Having said that, your medical aid can insist that you use a Designated Service Provider (DSP) when receiving treatment for a PMB, so it is important to read your scheme rules. If you choose to be treated in a non-DSP, your scheme may penalise you in the form of a co-payment.

Because of the varying number and types of gap cover policies available, it is often difficult to do a comparative benefit and premium analysis and it may be worth your while seeking advice from an independent healthcare advisor who can guide you through the process.

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