Gap cover for medical expenses almost as important as a good medical aid

You need gap cover for your medical expenses, even if you and your family are members of a good medical aid scheme.

Unexpected shortfalls in your medical cover when you have a medical emergency or even for a planned medical procedure can leave you with a hefty bill that will destroy your budget.

Gap cover is a short-term insurance policy that covers the difference between costs paid by your medical scheme and actual medical expenses for in-hospital treatment and defined out-patient treatment, says Michael Emery, marketing executive at Ambledown Financial Services.

“Many people discover too late that, while their medical aid will cover 100%, 200% or even up to 300% of their tariff for hospital treatments and procedures, the true costs of procedures could be far higher.

“No matter how comprehensive your medical aid is, there is a strong likelihood that not all your costs will be covered, resulting in a shortfall which you or your family must pay. Patients without gap cover often find themselves with a large bill from specialists after a severe illness and lengthy stay in hospital,” he says.

If your bill from your specialist is, for example, R10 000 and your medical aid pays R3 000, you will need to pay the R7 000 shortfall. If you have gap cover, you can submit a claim for the remaining R7 000.

 “Medical aid schemes often only cover costs according to their tariffs, while many healthcare service providers and specialists charge more than the medical aid scheme tariff. This gap in cover can amount to tens of thousands of rands.”

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Gap cover designed to cover shortfalls

Gap cover is designed to minimise shortfalls, covering up to 600% of medical costs, less the medical scheme reimbursement rate and many gap cover products also cover certain co-payments and sub-limitations imposed by medical aid schemes, Emery explains.

You can use gap cover to help pay for major medical hospital admission co-payments and the shortfall of what is owing after your medical aid cover for a hospital admission or certain procedures. It can also offer cancer cover and dread disease benefits.

However, Emery says, it is important to remember that gap cover is not a medical scheme. The cover is not the same as that offered by a medical aid scheme and it is therefore not a substitute for medical scheme membership.

This cover is only available to medical scheme members and is designed to cover in-hospital treatment and procedures and certain defined out-patient treatment and procedures, such as chemotherapy and radiation for the treatment of cancer, as well as certain scopes and scans.

“These policies are not designed to cover day-to-day shortfalls and charges that occur once your medical savings account has been depleted and gap cover will not cover any procedure not covered or declined by your medical aid scheme.”

However, Emery says, it is not possible for a gap cover provider to calculate upfront what the costs of a treatment will be and what the patient will be responsible for as the cover will only be calculated once all the bills have been submitted to your medical aid scheme and the scheme has determined its liability.

Once a claim is submitted, a claims assessment is completed and payment is made to the principal member. When it comes to specialists, gap cover will only cover up to a maximum of its cover limits. Most gap cover providers cover 600% of the medical scheme tariff, less the amount paid by the medical aid.

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How much does it cost?

Premiums for gap cover can start as low as R180 per month to cover you and your family. As the benefits increase, so do the premiums. Emery says to determine which product best suits your needs you should contact your broker.

He points out that gap cover providers generally charge a higher premium if you become a member later in life when you are over 65. Gap cover policies also generally include a 12-month waiting period for any pre-existing conditions.

As gap cover is a short-term insurance product, the premiums are not tax deductible, but the benefits, on the other hand, are not taxable.