There is no denying that private healthcare costs in South Africa, especially with regards to hospitalisation, is exorbitant by any measure. South Africa has one of the world’s best private healthcare systems and this is largely fuelled by the well managed private hospital groups. However, without medical aid most South Africans would not be able to afford in-hospital care in South African private hospitals. Although medical aids cover most hospital care bills, doctors charging above the NHRPL (National Health Reference Price List) rates, can leave many a patient out of pocket. Some medical aids do pay higher than the NHRPL rates for in-hospital care but it may not be sufficient. Fortunately, the financial services industry has developed gap cover for medical aid which tops up on the payout above the NHRPL rate.
What is medical aid gap cover?
Quite simple, medical aid gap cover is a form of insurance that pays the difference between what the doctor charges and the medical aid rate (more correctly the NHRPL rate). Most insurance companies, and even some medical aids, provide gap cover as an optional extra. Assume that your doctor charges you R5,000 for an in-hospital procedure but your medical aid only reimburses you a maximum of R2,000 as outlined by the NHRPL, gap cover will pay the difference. Normally the patient is liable for the difference and would have to pay for it in cash out of their own pocket.
However, gap cover for medical aid has now changed the ball game and protects patients against the financial implications of receiving treatment from doctors who charge higher rates. It is the ideal product for all medical aid members, especially those concerned with hospitalisation costs. In this day and age where most people are cutting costs by switching to medical aid hospital plans only, gap cover essentially provides the top up starting from about R100 per month.
Medical Aid Gap Cover vs Hospital Cash Plans
South Africans are familiar with medical aid but another product that can be confusing is a hospital cash back plan. The latter is essentially an insurance policy that pays the holder cash for each day spent in hospital. Although it can all be a little confusing, the bottom line is that a medical aid, a hospital cash plan and medical aid gap cover are all different financial products. Each has its own benefits and if you can afford it, you should have all three forms of cover.
A hospital cash back plan is not the same as gap cover and while you can use the payout from a cash plan to fund the difference in costs from what your medical aid pays and what you doctor requests, cash plans may not offer the same level as protection. It is all about the nature of the payouts. Hospital cash plans pay a flat rate per day in hospital as cash in your hand to do with as you please. Medical aid gap cover pays the difference between the doctor’s bill and medical aid payout and does not put cash in your hand.
The hospital cash plan may seem like an attractive option, and it is an excellent financial product, but it should not be a means to top up on cover for your medical bills. Consider the fact that hospital cash plans only start paying out after a deferred period of about 2 to 3 days. This means that you will not receive a payout if you are hospitalised for less than 3 days. Yet within 3 days in hospital you can undergo major medical procedures that can land you with a hefty bill above and beyond your medical aid payout. Only gap cover will make up for this difference. The gap cover pays out according to the NHRPL rate whereas a hospital cash plan payout is independent of the tariffs.
Benefits and Payout
Medical aid gap cover pays out according to a percentage of NHRPL. It may pay between 300% to 400% of the NHRPL rate. So while you medical aid reimburses you or the doctor 100% of the NHRPL, the gap cover will pay the difference up to 3 to 4 times of NHRPL depending on what you doctor charges. Like it or not, medical professionals do tend to charge patients a higher rate when they are receiving treatment in hospital. Medical specialists are demanding higher rates that is not in keeping with the National Health Reference Price List or what your medical aid is prepared to pay. The reality is that if you want to best healthcare, you have to be prepared to pay for it and medical aid will go only so far. Medical aid gap cover is essentially the lifesaver that make up for the difference.
What is not covered?
It is important to understand the fine print. While medical aid gap cover will pay for in-hospital costs for medical and surgical treatment, it only pays for treatment related to illness and accidents. Elective and cosmetic procedures are not covered in much the same way as medical aid does not cover it. Similarly fertility treatments are not covered. You have to be under 60 years of age to qualify for medical aid gap cover so it is not a product for every medical aid member.
Out of hospital treatments, like chemotherapy and radiotherapy for cancer is covered, as well as dialysis for kidney failure, but almost no other out of hospital test or treatment is covered by gap cover. Nevertheless, medical aid gap cover does ensure that you are protected for the most costly procedures in medical care.