Gap Cover: Why It’s Something You Should Consider

gap cover

As a consumer of medical aid in South Africa, you’ll probably expect most medical procedures to be covered in full.

Sadly, nothing could be further from the truth. Soaring medical inflation, coupled with unchecked specialist practitioner fees, has contributed to an ever-widening medical aid gap.

What is the medical aid gap

Subscribe to a medical aid option, and you’ll notice your major medical aid benefits are paid out at a defined percentage of the scheme rate. It’s typically between 100 percent and 300 percent, depending on the level of cover you have chosen.

For the uninitiated, this may appear as if the scheme will cover all costs incurred in hospital one hundred percent… or more.

Actual rate vs NHRPL rate

However, the scheme rate is not the actual rate charged by hospitals or specialists. Far from it. In fact, it is based on a government initiative known as the National Health Reference Price List (NHRPL), which is simply a tariff guideline.

In reality, practitioners can charge up to five times the NHRPL or scheme rate. That leaves you with a significant funding shortfall, a shortfall more commonly known as the medical aid gap.

So, when you think you've signed up for 100 percent cover in-hospital, you have, in fact, subscribed to benefits that are paid out in full according to the NHRPL, and not at the market-related going rate.

The real impact of the medical aid gap

With medical costs rising year on year, the real effect of the medical aid gap is taking its toll on cash-strapped consumers.

As an example of the widening deficit between what medical aids cover, and what healthcare practitioners actually charge, we’ve listed three common in-hospital procedures, together with the estimated costs, what a standard medical aid plan will cover, and the resultant medical aid gap.

Procedure Estimated Cost Medical Aid Benefits The Gap
Caesarean Section R 15 500 R 9 540 R 5 960
Appendectomy R 19 650 R 14 320 R 5 330
Full Knee Replacement R 35 880 R 18 000 R 17 880

The solution – gap cover

Short term insurance companies in South Africa have provided a solution in the form of gap cover. For a low monthly premium, you can cover the medical aid gap and add an extra layer of protection for you and your family.

Today, there’s a choice of flexible gap cover insurance policies that suit all pockets. You can get cover at up to 500 percent of the scheme rate for under R300 per month for the whole family… and there are no limits.

Cash-in with extra benefits

Apart from covering the shortfall gap, these policies offer all sorts of extra benefits. These include cover for death and disability, premium waiver benefits and lump sum pay outs for members diagnosed with cancer for the first time.

Gap cover is a cost effective add-on to your medical aid that is worth every cent. In fact, financial brokers are advising consumers to go for cheaper entry- and mid-level hospital plans enhanced by gap cover.

Compare your monthly outlay with comprehensive plans that can easily cost R10 000 per month for a family of three, and you’ll win hands down.

Are you eligible for gap cover?

To be eligible for gap cover, you have to be a signed up member of a registered medical aid scheme in South Africa. You also have to be under a certain age at the time of registration.

As you are only paid out the deficit on legitimate medical aid claims, the exclusions imposed by your medical aid scheme apply to your gap cover insurance.