Gap cover will not cover anything that is not covered by medical aid, even if it is one of the benefits listed in a gap cover policy schedule
Today’s consumers are experiencing more medical expense shortfalls, co-payments and sub-limits than ever before.
As a result, gap cover has become an essential component in ensuring comprehensive medical cover and protection against unanticipated financial considerations.
However, gap cover does not cover everything and it is important to understand how it works to ensure you choose the right fit for both your needs and budget, as well as your medical aid plan.
Here are some common misconceptions and the facts to help you make the most of your cover.
Myth: I have comprehensive medical aid, so everything is covered
If you have a higher medical aid plan option, it is easy to assume that this means your medical expenses will be covered no matter what.
The reality, though, is that even on costly comprehensive and executive medical aid plans, you are likely to experience expense shortfalls, as specialists frequently charge many times more than the scheme rate for their services.
Comprehensive medical aid plans can cover up to 300% of the scheme rate but it has become common for some specialists to charge much more than this, often 500% to 600%, and in some cases even higher. This can result in massive medical expense shortfalls that will need to be paid out of pocket.
Even with gap cover in place this can be problematic, as gap cover typically offers cover up to 600% of the scheme rate.
It is always best to get a cost estimate from a specialist upfront, where possible, so you can make an informed decision.
Myth: Gap cover will pay my day-to-day medical expenses
Gap cover does not cover day-to-day expenses and it is important to understand this. Essentially, gap cover is there to cover the medical expense shortfalls experienced with hospitalisation, and related expenses, including sub-limits and co-payments.
Visits to the GP, as well as optometry and general dentistry, which are covered out of medical savings, are excluded from gap cover.
However, there are some additional benefits on certain gap cover plans — for example, some providers offer a casualty benefit that will pay out should you need to visit the emergency room outside of the working hours of a GP.
Myth: If my gap cover policy covers it, I can claim even if it’s not covered by medical aid
Gap cover policies often provide fairly comprehensive benefits for dread diseases such as cancer. For example, gap cover will cover medical expense shortfalls when a patient reaches their medical aid’s annual cancer benefit limit.
However, gap cover will not cover anything that is not covered by medical aid, even if it is one of the benefits listed in a gap cover policy schedule.
For example, your gap cover policy might state that it provides cover for shortfalls related to biological cancer drugs, however, not all medical aid plans will cover this, and if your medical aid does not cover it, gap cover will not either.
Similarly, gap cover might offer cover for scopes and scans, but if medical aid does not cover these at all, then gap cover might not cover it either, unless this is specifically stated.
It is important to understand how you are covered and to make sure that your gap cover is aligned with your medical aid scheme and plan.
Myth: If I make use of a broker, it will cost me money
Your broker or financial advisor is invaluable in helping you to ensure that you have the right medical aid to suit your age, life stage and budget and in helping you to select the most appropriate gap cover that aligns with your medical aid and your financial requirements.
Brokers earn commission from medical aids and insurers, so it costs you nothing to lean on their expertise, and independent brokers have a wealth of knowledge and industry experience that can be hugely beneficial.
When it comes to protecting yourself against medical expense shortfalls, they can help you to understand your benefits and to ensure your cover meets your needs today and as they change in future.
James White is the director of sales and marketing at Turnberry Management Risk Solutions.