Medical Gap Cover Costs Rocket
It is frightening and disheartening when the very thing that cash strapped South Africans regard as their lifeline – gap cover – goes up beyond what is considered the norm.
People with medical aids in South Africa have already switched to inferior plans . With medical aids cutting back on their benefits even while premiums soar higher, the rising cost of medical gap cover has come as the final straw to break the camel’s back.
If the largest provider of gap cover, Guardrisk can increase their premiums on its policies by as much as between 7 and 34.2%, then you can know that the other providers will be doing likewise.
Gap Cover Costs – an Expensive Lifeline
Alexander Forbes is a specialized financial services group and acts as a broker for employee groups. Where an existing insurer applies a high increase, Alexander Forbes tries to find a better-priced policy, but these days this isn’t possible.
Medical aids limit their cover to the Medical Scheme Tariff (MST). The trouble is this cover falls woefully short of what specialists charge.
Gap cover has always been the knight in shining armour, paying the gap between what the medial aids will pay out and what the doctors charge. Up until now affordable gap cover has stepped in and taken charge of this surplus amount. But now things are changing and gap cover itself is becoming so expensive, people are considering going without it.
Demarcation Regulations were developed to separate medical schemes from health insurance products. The second draft demarcation regulations acknowledge the role of health insurance in the South African market. These health insurance products, sold alongside medical schemes, are for people who can’t afford medical scheme cover.
The idea of the second draft of the demarcation regulations is to ensure that insurance doesn’t undermine the cross-subsidisation by young and healthy medical scheme members of older scheme members who are possibly more sickly.
The second draft also provides for the continuation of gap cover for medical scheme members. But it doesn’t end there, gap cover is subject to an annual benefit limit of R50 000 per policyholder.
There has been a huge increase in people looking for gap-cover policies because the gap between what specialists charge and what schemes reimburse has risen because of the absence of guideline tariffs for their services.
But what is it with gap cover – not only are their premiums rising, they are also not always available to pay up. For instance, with Discovery Health’s KeyCare members, they need to know that non Prescribed Minimum Benefit (PMB) surgery and treatment related to knees and shoulders won’t be covered in 2016 and because this is an exemption from obligatory medical scheme payment, gap cover doesn’t need to fund this treatment.
Rising Gap Cover Costs – But Still Worth Holding Onto
Medical aid premiums are rising and so is gap cover. If you’re despondent and wondering where it will all end, just one hair-raising visit to some of the public hospitals in the country will having you holding onto your medical aid and gap cover with all your might.
In South Africa, you need to protect yourself with medical shortfall solutions, and if gap cover costs are rising too fast, for your own peace of mind, you have to rise to the occasion and simply pay up.
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