Many people who have a basic medical scheme and take out Gap cover believe they are completely covered, but this is not always the case.
Gap cover is designed to cover the shortfall between what your medical scheme pays and what is charged by private doctors or hospitals. For example, if a specialist visits you in hospital and charges you R1 000 and R600 is covered by your medical scheme, your gap cover would pay R400 – or so you hope.
Gap cover policies are unlike medical schemes – that they insurance products. Providers need to keep expenditure down if they want to remain financially viable and make profits.
Gap cover used to pay the full difference between what your medical scheme paid scheme and your bills for private doctors and specialists while in hospital. Even if you had the cheapest hospital plan that only paid a small percentage of the costs, you would still be fully covered.
New calculation methods
Automatic full payment of any shortfalls is not sustainable in the long run and gap cover providers now have a different way to calculate how much they will cover. What many of them have switched to is a payout system based on what your medical scheme pays. For instance, some of them will pay twice what your medical scheme has paid.
In practice, what this would mean is the following: If your bill from a specialist is R35 000 and your medical scheme covers R17 000, your gap cover would pay R17 000 x 2 (R34 000). You would be responsible for R1 000. If you didn’t have Gap cover, you would have to pay a shortfall of R18 000.
If you have a medical scheme that pays out more than 100% of the medical aid tariff, it works to your advantage.
For example, if your medical scheme paid R20 000 off your bill of R35 000, and your gap cover paid twice that (R40 000) it would amount to more than your total bill. You would not receive the difference, but your entire bill would be covered by your medical scheme and gap cover together.
What Gap cover does not cover
Here are some of the things gap cover won’t cover:
- Pre-admission consultation costs;
- Ward costs in hospital or step-down facilities;
- Routine medical exams, such as ultrasounds;
- Medication (in-hospital or take-home);
- External appliances (wheelchairs, crutches etc.);
- External prostheses;
- Home or private nursing;
- Out-of-hospital dental treatments.
You may also have a payment gap if your medical scheme has a list of hospitals you should use and you use a different one, or if your scheme pays for you to be in a general ward and you request a private one.
Some providers exclude any benefits your medical scheme doesn’t cover and most gap policies exclude cover for cosmetic procedures, suicide attempts, self-inflicted injuries or taking narcotics.
Depression and other mental health conditions are also likely to be excluded and participation in extreme sports or hazardous activities is also excluded. Most gap cover providers exclude pre-existing conditions for a waiting period of anything from three months to a year.
What you can expect from Gap cover
What gap cover you receive depends entirely on your insurance provider and the policy you choose. Some gap cover policies are basic and others are more comprehensive.
A policy may cover some out-of-hospital procedures for which you used to need hospitalization, but which you can now have done in a doctor’s surgery. It may offer co-payments for specific hospital procedures.
In certain situations, such as first-time cancer is diagnosed or in the case of permanent total disability or accidental death, a lump sum may be paid out.
Talking to your broker may give you more perspective on what gap cover policies are available and what would best suit your situation.