Most of us are familiar with private medical aid and understand the importance of it, but what about Gap Cover? It’s one of those things that we don’t necessarily want to pay for, if we can even afford it, but it does play a vital role!
What is Gap Cover?
It’s a short-term insurance product and is very different to medical aid. Some medical aid companies also offer Gap Cover as a product, but it’s a completely separate product (and probably a separate business) which has its own set of regulations and rules.
So firstly, you can’t have Gap Cover unless you actually have Medical Aid. It’s an “add-on” insurance and requires the basic medical aid to be in place.
Some people seem to think that your Gap Cover will cover all medical expenses that your medical aid doesn’t cover, but this is certainly not the case and it’s important to understand what it actually covers.
Thinking about your medical aid plan, you’ll no doubt know that it only covers certain procedures and has limits on visits to the doctor, dentist and other medical practitioners. Over and above the list of what is covered or not, there is also a limit on the amount that is paid for each procedure.
So, your Gap Cover will only come into play regarding the second part of the explanation above, ie the amount that is paid for each procedure. If your medical aid does not pay anything towards pathology (blood tests), then your Gap Cover will not pay anything either (most probably). If your Medical Aid only pays half of the bill then there is a good chance that your Gap Cover will cover the rest.
Gap Cover is insurance for the difference or “gap” between what was paid by the medical aid, and what is still due.
How does it work?
Let’s say you go to hospital for a small surgery. The role-players (people that you will have to pay) will be:
- The surgeon,
- the anaesthetist,
- perhaps the pathology lab for some blood tests,
- and the hospital itself for your stay
Each Medical Aid provider will have a set rate which they will pay per procedure or assessment and depending on your actual medical aid plan, they may pay the full bill for each party or more than likely just a portion. Some plans may cover you for 200% of the rate they set, but the doctor may charge three times that rate (or more). So Gap Cover is the insurance you purchase to cover the amount that the medical aid pays short.
Let’s say that Medical Aid “A” has decided that a fair price for the surgery you’re about to have is R6,750 but yet your specialist actually charges R13,500. You will need to cover the difference yourself, or if you have Gap Cover you can claim it from them.
How to choose the best option?
As with all insurance, there are terms & conditions. Clauses for this and for that and a whole lot of complicated jargon. In fact, Gap Cover won’t necessarily even pay for the full difference between the health-care provider and the medical aid as the Gap Cover itself has various plans and options to choose from.
So to start with, there probably isn’t really a “best one” as each will have pros and cons. Rather look for the Gap Cover that suites you best based on your current circumstances.
Some things to look out for are:
Start off by fully understanding what your current medical aid plan covers and doesn’t cover, and to what percentage of their prescribed rate. Eg do they cover you for 100% of their prescribed rates, or 200% (or more).
Then, looking at various Gap Cover options see to what maximum rate they will pay.
Let’s say the Doctors bill is R5,000 and the Medical Aid has only paid R1,000; you would need a Gap Cover plan to pay 500% of the prescribed rate in order to fully pay the bill without incurring any cost to you.
However, if you are willing to go to cheaper healthcare providers then you may be happy with a Gap Cover that covers a smaller shortfall.
There’s no right or wrong answer as we cannot unfortunately all afford the absolute best of everything. It is however vital to understand how this maximum rate affects future healthcare claims.
“Waiting periods” is something that seems really unfair, but it does make sense and all Gap Covers have them. If you know that you need a major surgery, you cannot simply get insurance and expect them to cover all expenses the next day! Each provider will implement waiting periods for all joiners, but these generally relate to pre-existing conditions – pregnancy included. Read their fine print and make an informed decision. The waiting period is the number of months during which you cannot make any claims (and thus pay premiums with no benefits).
It may give you some comfort to know that Gap Cover is fundamentally designed to insure you against unforeseen medical costs and is not held up by these waiting periods. If you had to end up in hospital for unforeseen circumstances, and not because of any prior condition, then those costs would possibly be paid for (or a portion thereof).
Look at the waiting periods defined by various Gap Cover providers and decide what is manageable for you.
More expensive is not necessarily better, but you do generally get what you pay for. Lower premiums will give you lower benefits and higher premiums better benefits.
You need to find something that is affordable and fully manageable within your budget. Healthcare should be a priority but often isn’t reflected as such in our monthly spending.
Gap Cover is really important if you plan on using private healthcare services. Don’t be fooled though as it doesn’t necessarily cover all expenses not paid for by your medical aid.
As with all insurance products, shop around, ask questions and take your time to make an informed decision.