By Michael Emery
Too often, people assume that because they have medical aid, they are comprehensively insured against the costs for any medical eventuality. In fact, there are many different types and levels of medical aid, so one needs to know exactly what’s covered. No matter how comprehensive your medical aid is, however, there’s a strong likelihood that all the costs won’t be covered – that’s where gap cover comes in. It is intended to top up the medical aid cover, to cover the gap between what is charged and what the medical aid pays.
An important point to note is that gap cover is not a substitute for medical aid, so one can’t take the lowest level medical aid cover and expect gap cover to cover any financial shortfall. Specifically, you cannot claim on gap cover where no benefit is provided by the medical aid under that specific plan – remember it’s not a substitute for medical aid but a complementary product. If your medical aid cover excludes a specific treatment, your gap cover won’t cover it either. Rather, if your medical aid covers 100% of the tariff while the treatment is billed at 200%, your gap cover will settle the difference.
One particular area in which expenses are likely to be very high is the use of specialists. South Africa has a shortage of medical specialists, so their rates typically vary from anything between 100% and 600% of the medical scheme’s cover. A clear reason why gap cover is so important to ensure you aren’t left with empty pockets!
Understanding the difference between casualty outpatient and in-hospital care
Once you’ve understood the basic principle of gap cover and why it’s so necessary, it’s important to look further into the details of how the two work together. To do that, it’s important to understand the difference between casualty and emergency care.
A person who presents themselves to casualty unit will either be treated as an outpatient, or the case will be deemed to require immediate hospital care and he or she will be admitted.
When an individual is being treated as an outpatient in the hospital’s emergency or trauma sector, his or her medical expenses are covered by the medical aid if that is a benefit, and the balance of what is not covered may be claimed from gap cover (depending on your gap cover plan).
In-hospital emergency care
By contrast, an emergency is characterised as the sudden and unexpected onset of a medical condition and is diagnosed as requiring immediate attention by the attending medical practitioner. If the patient is then admitted, they will be covered by their medical aid hospital cover.
As with treatment for casualty outpatients, do not assume that you are fully covered by your medical aid and hospital plan. Again, the actual charges for specialists can be much higher than the medical scheme’s benefits, and gap cover can be used to make up the shortfall.
Your medical aid hospital plan will cover you for the amount as stated by your plan. If a specialist who charges at 300% of medical scheme rate and they are treating you while in hospital, and your medical cover only includes 100% cover, you will be responsible for the balance. And this can add up to a large amount, depending how long your stay in hospital is and the treatment required – with the specialist seeing you generally once a day, if not more. Gap cover can cover the balance of what is not covered and still owed to the specialist.
Very often after a severe illness and lengthy stay in hospital, patients without gap cover find themselves out of pocket when a large bill arrives from the specialists, charging over and above the medical scheme’s tariff.
Another area in which gap cover is misunderstood is hospital choice. The medical aid plan will typically specify which hospitals should be used – this is a measure aimed at reducing high costs. If non-network hospitals are used, then the medical aid would reject any fees above its tariff and may impose a penalty co-payment. In such instances you need to check your gap cover, as your policy may or may not cover these costs, or may provide you with partial cover.
Specialists
It’s also important to note that consultations with specialists who happen to have rooms at the hospital would not fall under in-hospital patient treatment regime. In the case of a non-emergency specialist treatment while in-hospital, the medical scheme would pay its tariff and the patient would be responsible for the shortfall, for which a gap cover claim can be submitted.
A final point that needs to be made is that it is not possible for a gap cover provider to calculate upfront what the costs of a treatment will be, and what the patient will be responsible for. This is because the gap cover will only be calculated once all the bills have been submitted to the medical aid and they have determined their liability. As for specialists, remember that gap cover will only cover up to a maximum of their cover limits (most being 600% of the medical scheme tariff, less the amount paid by the medical aid).
Gap cover should be an integral part of your strategy for mitigating medical risk. It’s worth spending some time to understand exactly how it works. Note, gap cover is designed to cover in-hospital treatment and procedures and certain defined out-patient treatment and procedures (such as chemotherapy and radiation for the treatment of cancer, certain scopes and scans). Gap cover policies are not designed to cover day-to-day shortfalls and charges once your medical savings account has been depleted.
Michael Emery is marketing executive at Ambledown Financial Services.
PERSONAL FINANCE