Gap cover

How Gap Cover works

So you may be wondering how gap cover works. Don’t worry, you’re not alone in this! It seems silly that you need medical aid and gap cover, but have a look at this post on the basics of gap cover before continuing on with this one.

Essentially though, your medical aid will cover your medical costs based on a standard set of costs. Your healthcare professionals however can charge whatever they want. Hence, a big gap between what the medical pays versus what the real cost is. And that’s what gap cover is all about – the difference between what the medical aid will pay, and what is charged.

Let’s look at the costs involved in having a baby, and see why gap cover is so essential.

Babies are expensive

New mom is the principal member of the medical aid plan. She has a hospital plan, which essentially means that her medical aid pays her ‘in hospital’ costs only, and up to medical scheme rates for that particular scheme.

That’s okay though as Mom also has gap cover and has been a member of the current Gap cover for a period of 26 months. It’s important for Mom to know how long she has been a member of the Gap cover as this specific Gap cover has a waiting period of 10 months for childbirth claims. Some other policies have a 12 month waiting period.

She’s paying R315 for the family and is covered for an additional 500% over medical aid rates – most other companies cover up to 500% (the ‘up to’ is important to note and often implies small print)

These are the costs that were charged whilst in hospital and which were subsequently submitted to the Gap cover provider.

These were real costs in 2016, scary to imagine what the costs may be now!

Their invoiceMedical Aid paidGap / Shortfall
ObstetricianR18, 000R3,704R14,296
Hospital costs R29,470 R29,470 N/A
Pediatrician R2,266R1,216R1,050

And that, folks, is how gap cover works. It’s simply the shortfall between the true expenses and what the medical aid covers.

In this example the gap cover will pay the R17,821 shortfall that Mom would otherwise have needed to pay.

What is gap cover?

Gap cover is about expecting the unexpected, and facing reality

Medical aid doesn’t always protect you from the things that you fear most – unplanned medical costs. The reason is simple. They compensate you for costs resulting from your hospitalization, but only up to an approved amount per ICD-10 code; and that’s it.

You’ll note that Mom’s medical aid paid her hospital costs in full; that’s simply because hospitals generally charge 1 times medical aid scheme rates. Medical professionals, however, don’t – and this is generally where the gap arises.

We don’t like to think of the need for hospitalization other than for exciting things like childbirth, but one has to think of the possibilities around unplanned medical expenses and what this might mean for your wallet.

It’s not uncommon to need a hernia surgery or have an operation on your eye. Or well, any part of you. Our bodies are rather unpredictable.

Do note though that gap cover only pays out on items that your medical covers. So if your medical aid does not cover a particular procedure, your gap cover won’t either.


Finally, although Gap Cover can feel like yet another cost being piled on top of your insurance and medical aid, it is a VITAL addition. Assume that ALL private medical professionals charge more than the hospital rate, because they all do.

Yours in health, financial and otherwise.

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