GAP COVER POLICIES

Gap cover policies, which have become popular as a way of supplementing medical scheme cover, have been allowed to continue under the demarcation regulations.

Whereas gap cover limits were determined by individual insurers in line with industry norms (you could buy cover of up to R1 million a year), the new regulations limit cover per individual to R150 000 a year.

Roseanne Murphy Harris says the benefit cap on gap cover may help to counter escalating healthcare expenses, because in the past some healthcare specialists may have increased their fees according to how much insurers paid, contributing to medical inflation.

Mike Settas, the director of Kaelo Xelus, a provider of gap cover, disagrees with this view. He says there are many reasons for the high fees specialists charge, and capping benefits will have no effect on medical inflation.

First, Settas says, it’s simply a matter of supply and demand: specialists in short supply in a particular discipline will charge more for their services.

Second, specialists face escalating costs, particularly for liability insurance – gynaecologists and obstetricians now pay about R1 million a year to cover themselves when faced with malpractice suits.

He says isolated practitioners may have charged more if a patient had gap cover insurance, but this was the exception.

Settas says the new regulations will not have much of an effect on business, and very few claims in the past exceeded the now-imposed R150 000 annual limit.

He expects the gap cover market to grow now that the uncertainty surrounding the future of these products has been removed and, more pertinently, because medical costs will continue to soar.

Gerhard van Emmenis says you should be aware of the following when you buy gap cover:

• Cover differs from policy to policy in terms of the percentage payout, as well as any waiting periods (how long you must wait before you are covered) or exclusions (events or circumstances in which you are not covered);

• You may need gap cover even if you have a top-of-the-range medical scheme option, because there might still be gaps between what your scheme pays and the amounts specialists charge; and

• Never assume that all costs will be covered. “Gap cover is by no means a cure-all solution to avoid co-payments,” Van Emmenis says.