What is Gap Cover?

What is gap cover you ask.

Gap cover is the insurance industry’s answer to medical aid shortfalls. And the fact that South Africans spend about 20% of their monthly earnings on medical aid. And yet when they need medical care they find they do not have full cover.

After enduring illness or injury medical aid members increasingly find that they have to pay cash shortfalls. So what is gap cover and does it help?

What is gap cover?

Gaps of R20 000 to R30 000 are quite common. And there are often gaps of R100 000 that medical aid members find themselves owing.  This usually involves cancer treatment, cardiac operations and orthopaedic surgery.

Some examples  to answer the question what is gap cover:

  • Surgeons and anaesthetists may charge more than the medical scheme benefit. This can be as much as four times more than your medical scheme will pay
  • The medical aid scheme might have co-payment or deductible amounts on certain procedures
  • Your medical scheme might have annual sub-limits on certain expensive items such as prosthetic devices

Insurance companies have come up with a legal, affordable way to bridge the divide between what your medical scheme what pay and the total amount of your medical bills. This is known as gap cover.

What Gap Cover Is

Michael Settas, the managing director of Xelus Specialised Insurance Solutions, says the situation of underpayment my medical schemes is because there is an under-supply of medical specialists while medical schemes are under pressure to keep expenses under control.  A scarce supply of skills means higher prices.What is Gap Cover

Then there is the fact that specialists can charge what they like. In real terms, specialists now charge double what they did in 2000.

Settas points out that few medical schemes provide fully comprehensive cover for specialist care in hospital, meaning that without extra insurance cover medical scheme members could face major out-of-pocket expenses for surgery or other treatment in hospital.

Gap cover does not replace medical aid and you can only take out this type of insurance if you belong to a medical aid scheme,” says Settas.

The Council for Medical Schemes (CMS), the statutory body that administers the medical schemes, is between a rock and a hard place. It acknowledges the high cost of specialist care (Circular 54/2011) although it also has so-called Prescribed Minimum Benefits (PMBs) in place that oblige medical schemes to pay the bill. However, this does not happen in reality. This is because the PMB “Payment at cost” stipulation is that it applies only to specialists who are contracted to medical schemes. They are known as DSPs (designated service providers).

Settas says that because specialists are in such high demand there is no incentive for them to partner with medical schemes. They make more money on their own. This is a particular problem with anaesthetists, very few of whom are DSPs.

Settas added that only 51% of procedures fall under PMBs.

Disagreement About Gap Cover

What is more, recently there has been a disagreement between medical professionals and medical schemes. In March 2013, the Health Professions Council (HPCSA) issued a press release saying it was concerned that medical schemes were influencing DSP doctors to make clinical decisions aimed at cost-cutting that were not necessarily in the best interests of patients.

All these factors are making medical aid members uneasy. They don’t know if they will be fully covered if they need expensive medical care.

Supplementary “gap cover is the only solution that offers medical scheme members complete peace of mind.

To get an online gap cover quote, click here

All info was correct at time of publishing