Master of Money Management

Mind the Gap-Medical Gap Cover

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Many people wrongly assume that if they have a Medical Aid they are covered for all illnesses that require hospitalisation. They usually find out this nugget of information when they are presented with an unpaid bill. Medical schemes limit their cover to their Medical Scheme Tariff (MST) amounts. And these often fall short of the full doctor and specialist charges.

One way to mitigate this is to consider a product called Gap Cover. There are many companies that offer this product and their benefits differ, so take the time to compare offerings. Gap Cover is designed to cover medical scheme shortfalls that result from in-hospital doctor’s charges and extends to medical scheme shortfalls on out-patient procedures.

They can also include a personal accident benefit if you are disabled as a result of an accident. It would also cover the cost of emergency services such as transportation, counselling and life support equipment.

Why do I need Gap Cover?

When you need a major procedure, having to pay in extra cash is the rule rather than the exception. The use of specialised equipment is often not covered and doctors can hike up their fees well beyond what the medical aid pays out. For this reason, medical gap cover can be a valuable addition to medical aid cover. But it’s important to be aware that gap cover cannot replace your medical aid.

Day-to-day services such as doctor’s visits, specialist’s visits, and glasses are not covered. The kind of out of hospital procedures that are covered are surgical Biopsies, vasectomies, cataract removal, tonsillectomies and grommets etc. Make sure you consult the full list provided by the service provider.

As with all insurance policies there will be a list of exclusions and conditions. Read them carefully and if in doubt, call the service provider for clarification and better still, get all undertakings in writing. Cover is guaranteed and no applications are declined.

The difference between a Medical Aid and a Health Insurance policy

Unfortunately a good medical aid is out of reach for many South Africans. The insurance industry has seen the need to create an insurance based product to try and bridge the gap. Health Insurance is less expensive than a traditional medical aid because the cover is limited. If you can’t afford a medical aid then Health Insurance is a viable option.

Medical insurance plans fall under long term insurance in terms of financial services. It is not regulated by the Medical Schemes Act. It is a stated benefits contract, so in other words if a particular event happens you will get paid a fixed amount regardless of the actual cost. The legislation that governs medical schemes dictates that certain emergencies and conditions are covered in full by the medical schemes regardless of the plan type you are on. They are called Prescribed Minimum Benefits (PMB’s). This legislation does not apply to Health Insurance policies so they may not cover all of the costs. Still, if you can’t afford a medical aid, a health insurance policy will take the sting out of an expensive medical event.

A health Insurance policy is not a medical aid but rather a subscription to a network of medical services such as doctor and dentist Networks. There is no claiming process as with a medical aid. The member visits the medical services provider such as the network GP or Dentist, obtains medication or other relevant treatments without having to pay unless the treatments and or medications are excluded in the policy. Their hospital plans are insurance policies that pay the stated benefits directly to the member. The hospital will usually ask to be paid up front for treatment as there is a risk that you will not hand the money over and go on holiday to recover.  The policy includes disability and dread disease cover as well as death benefits which medical aid does not.

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