Weekend Argus (Saturday Edition) - - FRONT PAGE -

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.

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