New Rules Allow Gap Cover to Stay Intact
After many years of consultation, last year in December, Treasury announced final demarcation regulations, ending the uncertainty about the future of gap cover. Here we will look at new rules to keep gap cover intact.
Pravin Gordhan, the finance minister, as well as health minister, Aaron Motsoaledi have no issued the final demarcation regulations under the short- and long-term Insurance Acts.
The issue is about making sure there is a distinct different between medical scheme products and health insurance.
Maximum Payouts Now Keep Your Gap Cover Intact
Gap cover, which covers clients for shortfalls and co-payments, will continue to exist. But now as from 1 April, 2017 strict regulations will be in place with regards to the amount that they payments can be.
Just as a matter of interest, there was a time when it was thought that gap cover would be totally outlawed, but it was allowed to continue. Under scrutiny again, medical gap cover will be allowed to continue. But now the new policies will be subject to regulations as well as maximum payouts.
Gap cover policies will now limit to a payout of R150 000 for each client and each year. Before this, medical gap cover was unlimited.
New policies will have to comply as from April this year, but existing policies will have to comply with the new regulations from January 2018.
Motsoaledi has always criticised gap cover policies, saying that they just allow doctors to charge what they like. There was a time when gap cover was all but scrapped, but it has survived out of sheer necessity.
Now new regulations will be outlawing primary health care policies. The high cost of medical scheme membership is a deterrent to many, and also that the new budget benefit options will cover this gap.
Gap cover policies, as well as hospital cash plans, fall under the long-term and short-term Insurance Act. Gap cover only covers in hospital visit costs.
The difference between gap cover and hospital cash plans is that the hospital cash plan doesn’t pay your medical bills. But as an insurance plan it pays you for each day you find yourself in a hospital. These hospital cash plans also limit to a maximum of R3000 per day.
Don’t Just Pay Up
Paresh Prema, Council for Medical Scheme’s general manager, says that even with medical gap cover, medical aid members should be proactive. If a surgeon recommends an elective procedure, do research first. Before you get authorisation, first find out from your medical scheme how much of the cost they will cover.
It is important as the National Treasury has introduced new medical scheme regulations which will see a limit on the amount of gap cover you can claim.
There is also an effort to ensure there is a difference between medical scheme products and health insurance. The regulations will come into effect in April 2017. And will stipulate that gap cover policies will limit to a payout of R150,000.
All these changes are in place to essentially prevent doctors from charging high tariffs.
Treasury has now at last gazetted final demarcation regulations on the future of gap cover as well as hospital cash plans.
Change in Regulations to keep Gap Cover Intact.
Pravin Gordhan and Aaron Motsoaledi published the final demarcation regulations. Everyone with a medical aid is only too happy that gap cover will continue to exist. But now just with strict regulations.
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