Gap cover is not unique to financial products. For years there has been this additional protection to cover you for any shortfall where insurance does not pay the full amount. Now there is medical aid gap cover as well for when you scheme does not pay the full bill. In this day and age when South African practitioners, especially medical specialists, charge above the NHRPL rate, gap cover can make that difference in affording the high quality of private healthcare that you want. Without it, you will have to fork out cash from your pocket to pay the shortfall that your medical aid does not cover.
How does gap cover work?
Simply, gap cover pays for what your medical aid does not in terms of healthcare costs. This is a bit oversimplified though. Medical aids pay according to the NHRPL – National Health Reference Price List. Some better medical aid plans will pay above the NHRPL when you are hospitalised but the bottom line is that the NHRPL is what the average South African calls “medical aid rates”. Despite these tariffs and pricing structure, many doctors do not charge NHRPL rate and it is their perogative. They may charge what is commonly referred to as “private rates” which means above NHRPL rate or also known as SAMA rates. These private rates are higher than the NHRPL rates.
While your medical aid pays the NHRPL rate for the specific consultation or procedure, gap cover will pay the difference between the NHRPL rate that you medical aid paid for and the private rate that your doctor demanded. Even the best medical aid may fall short in this regard and gap cover then takes over.
Benefits of Gap Cover
The benefits of having gap cover for medical aid is obvious. Prior to the existence of gap cover, medical aid members had to fork out cash for the difference between NHRPL rates and the private rates the doctor charged. So despite having to still pay your monthly medical aid premium and having cover for healthcare costs, you had to fork out above and beyond from your own pocket. Gap cover removed this financial strain on the patient and medical aid member. Gap cover for medical aid does not pay an unlimited amount. There is a an annual limit to payouts and it usually covers a certain percentage of NHRPL rates. In other words gap cover may only cover 300% to 400% of NHRPL.
Should you be seeing a doctor who charged above this, then you will still have to fund the difference from your pocket even after medical aid and gap cover paid out. Fortunately not many medical practitioners in South Africa are asking for ridiculous rates that surpass even the payouts of gap cover.
Costs of Medical Aid Gap Cover
The costs of medical aid gap cover may vary slightly among providers but usually starts from as low at R100 per month. Even more expensive plans are still just a few hundred rands per month and are nowhere as expensive as affording medical aid. Before you think that you do not wish to pay the extra, just bear this in mind – care following heart attack with bypass surgery can cost as much as R250,000 and even your cardiothoracic surgeon charged private rates, you may have to pay tens of thousands of rands from your own pocket even after your medical aid pays out. Suddenly a few hundred rand for gap cover does not seem all that expensive.
Cash Payout from Gap Cover
Gap cover for medical aid is NOT a hospital cash back plan. The latter pays out cash to its members for each day that they are in hospital. It may sound like a better option to have cash in your hand but sometimes this is not enough to cover the shortfall in medical expenses. Do not compare gap cover and hospital cash back plans. They are two separate financial products. Gap cover protects you against the healthcare costs that your medical aid may not pay while hospital cash back plans protects you against the financial implication of being hospitalised. Gap cover also pays for out-of-hospital expenses incurred whereas a hospital cash back plan does not.
If you can afford it then take both – gap cover for medical aid and a hospital cash back plan. Of course, medical aid cover is first and foremost. It is important to speak to your scheme or a medical aid broker about gap cover and get all the facts. The bottom line though is that in this day and age of practitioners charging above NHRPL rates, not having gap cover for medical aid is just plain risky.