Michael Emery | What’s Gap cover, and why do I need it?

Gap cover is an important safety blanket covering the difference between costs paid by your medical scheme and actual medical expenses for in-hospital treatment and defined out-patient treatment. However, many people have questions about how it works, and why it’s necessary.

Below are some of the questions we’re most commonly asked:

1. What is Gap cover?

Gap cover is a short-term insurance policy that covers unexpected shortfalls on medical expenses when you have a medical emergency or planned procedure for in-hospital treatment and defined out-patient treatment. Medical schemes often cover only costs according to their tariffs, while many healthcare service providers and specialists charge more than the medical scheme tariff. This gap in cover can amount to tens of thousands of rands. Gap cover is designed to minimise shortfalls, covering up to 600% of medical costs, less the medical scheme reimbursement rate. In addition, many Gap cover products cover certain co-payments and sub-limitations imposed by medical schemes.

2. I already have an expensive medical aid – why should I get Gap cover too?

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’s a strong likelihood that not all your costs will be covered, resulting in a shortfall which you or your family must pay.

Often after a severe illness and lengthy stay in hospital, patients without Gap cover find themselves out- of-pocket when a large bill arrives from the specialists.

With Gap cover, you can avoid the unexpected additional financial load on your budget. Example: If your bill from your specialist is 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.

3. How does Gap cover work?

Gap cover can help you pay 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. Once a claim has been submitted, a claims assessment will be completed, and payment will be made to the principal member.

4. What does Gap cover NOT provide?

Gap cover is not a medical scheme. The cover is not the same as that of a medical scheme and it’s not a substitute for medical scheme membership.

Gap cover is only available to medical scheme members and helps members pay the shortfall that often occurs between what a medical scheme will cover for services and what medical professionals actually charge for services. It 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, certain scopes and scans).

Gap cover policies are not designed to cover day-to-day shortfalls and charges once your medical savings account has been depleted. Gap cover will not cover any procedure not covered or declined by the medical scheme.

5. Can I determine how much Gap Cover will pay before undergoing a procedure?

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. This is because the Gap cover will only be calculated once all the bills have been submitted to the medical aid and they have determined their liability. As for specialists, remember that Gap cover will only cover up to a maximum of their cover limits (most Gap cover providers cover 600% of the medical scheme tariff, less the amount paid by the medical aid).

6. What does Gap cover cost?

Gap cover premiums can start as low as R180 per month to cover you and your family. As the benefits increase, so do the premiums. To determine the product that best suits your needs we suggest you contact your broker. It is also worth noting, most Gap cover providers charge a higher premium if you take out Gap cover later in life (generally from the age of 65). Gap cover policies also generally include a 12-month waiting for any pre-existing conditions. So, don’t wait to take out cover once you reach a certain age or require treatment.

It should be noted that Gap cover is a Short-Term Insurance product and the premiums are not tax deductible. However, the benefits are not taxable.