The importance of gap cover

Financial consultant, Janette Rooney, explains the importance of gap cover products and how they work.

Did you know that when you join a medical aid scheme you may not be fully covered in-hospital? Depending on your medical aid scheme and plan chosen, you may have large shortfalls in-hospital where doctors charge above the specific scheme rate. 

Your medical aid may provide cover at 100% of their specified rate. This may make you think you are fully covered, as 100% sounds like full cover. However, it is of the scheme rate. 

If your doctor charges R20 000 for an operation and the medical scheme rate is R12 000, the medical aid is only going to pay out R12 000. You would then be liable for the R8 000 difference between what the doctor charged and the medical aid rate paid.  

Covering the shortfalls

Gap cover products were developed to assist clients in paying towards various potential in-hospital shortfalls, such as doctor’s charging above the medical aid rates. 

There are other potential areas were patients can experience shortfalls in-hospital, such as co-payments for certain procedures, or not using a designated hospital network. Some benefits have sub-limits and patients may be required to cover any costs over the sub-limit.    

Discuss with a financial advisor

There are various gap cover products on the market. If you’re considering purchasing a gap cover product, it’s best to discuss this with a financial advisor.  

The type of cover you need is dependent on your medical aid scheme and the potential shortfalls on your chosen plan. 

Ideally, if budget allows, one should try to cover as many of the potential shortfalls as possible.   

Some gap cover products are only available to members of a specific medical aid scheme. You can only opt for those gap cover products if you’re part of one of those medical aid schemes. However, you do not have to choose a gap cover product just because it’s offered by your medical aid. 

There are a number of gap cover products available that provide a wide range of cover and these do not need to be linked to your medical aid scheme. 

The advantage of this is, if you opt to change your medical aid, you don’t necessarily have to change your gap cover provider. 

If you change medical aids, it’s advisable to check if your gap cover selected still suits the new plan chosen.  

Waiting periods

Gap cover products generally have a three-month waiting period, where no claims can be submitted during the first three months of joining. However, some of the product providers will still consider claims in the case of an accident.

Further to this, most of the products offer a 12-month exclusion on pre-existing conditions, where again no cover is provided for the first year for pre-existing conditions, such as pregnancy and cancer.

For example, if you’re diagnosed with cancer and purchase a gap cover product (that has a cancer benefit) after diagnosis, some products will impose a 12-month exclusion. They will then only provide full cover after a year of your cover starting. 

It’s important to check each product’s waiting and exclusion periods when comparing products. There are other potential waiting periods, for example 10 months for certain pre-defined conditions or procedures. 

As with all products there are certain exclusions, where some products do not provide cover for certain procedures. If you move from one gap cover provider to another, some will give leniency, or possibly waiver the waiting and exclusion periods. 

Again, it’s important to check this when you’re considering moving from an existing gap cover product. 

Janette Rooney

MEET OUR EXPERT – Janette Rooney

Janette Rooney is an independent financial advisor and owns her own brokerage, Le Forge Financial Consultants. She started her career, in 1993, in the medical aid industry, working for Medscheme and then for Discovery.