Many individuals are under the impression that their medical scheme will cover all medical expenses since they stipulate 100% cover. This, however, is not the case. This month we explain how medical aids work and why gap cover provides you with more comprehensive coverage.
How do medical aid cover limits work?
All medical aids have specific categories for each benefit, with a limit per category. Categories include oncology benefits, maternity cover, out of hospital cover, etc. If you consider the oncology benefit of your medical aid for example, it could stipulate that you have cover for the first R200 000 for approved cancer treatment, depending on your type of plan since each medical aid plan benefits and limits differ.
It is therefore important to be aware of these limits per benefit included in your medical aid plan, to know exactly what you are covered for. Also check these details before you undergo a specific medical procedure and do not assume that because you have medical aid, that it will cover any and all medical-related expenses and procedures.
Full cover vs 100% cover
If your medical aid plan stipulates 100% cover for all medical expenses, this only refers to 100% of the scheme tariff. The scheme tariff is a predetermined rate by each medical scheme for specific treatments and procedures.
For instance, if your gynaecologist charges R900 for an antenatal consultation and the scheme’s tariff is R500, they will only pay R500 if they cover 100%. Therefore, you are responsible for paying the rest. Specialists can easily charge up to a 400% tariff.
This is where gap cover comes in.
How does gap cover work?
Should there be a gap between the rate paid by your medical scheme and actual medical bills due to higher rates charged by certain doctors and specialists, you will be responsible to cover these costs. Gap cover is designed to pay for this shortfall between medical aid payments and your actual medical costs, to avoid that you have to spend your savings on these bills.
It is important to remember that gap cover goes hand in hand with your medical aid plan – you cannot have a gap cover policy if you are not a member of a medical aid. Also, gap cover only covers medical expenses that were partly covered by your medical scheme. Therefore, if your medical aid completely rejected a specific line item or medical bill, your gap cover will also not cover it.
Gap cover solely exists to cover the ‘gap’ between what your medical aid pays and what additional costs you are responsible for.
Comprehensive gap cover
Similarly to medical aid coverage, gap cover products also indicate whether they cover 300% or 500% over and above the medical aid rate, for example.
Therefore, should you have a comprehensive gap cover in place, you could even consider downgrading your medical aid plan to a more affordable, less comprehensive option. However, before downgrading your medical aid plan, consult your financial advisor to discuss which plans are best suited for your needs and whether downgrading your plan is the best option.
Also note that certain gap cover products include benefits that are unrelated to your medical aid, meaning the specific benefits apply even though the scheme does not pay. These could include trauma counselling, casualty cover, preventative care and private wards.
Gap cover exists to cover additional medical expenses over and above your medical scheme rate. Having gap cover in place offers peace of mind, knowing that you and your family are covered comprehensively, should you be faced with excessive shortfalls towards your medical expenses.