A growing need for gap cover
Gap cover is becoming an increasingly popular way for members of medical schemes to protect themselves from unexpected medical expense shortfalls for in-hospital treatment, says Tony Singleton, CEO of Turnberry, a registered financial services provider that specialises in accident, health and travel insurance and funeral cover.
“Medial aids are under constant pressure to balance benefits with affordable contributions with the result that they put risk management strategies in place to manage costs,” he explains. “An example of this are a number of procedures which were previously done in a hospital and which are now being performed in day clinics. If you select to have these procedures done in a hospital, you are liable for a penalty.”
Given that illnesses and accidents don’t discriminate
based on age, he says gap cover is a tool that should be added to every medical scheme members financial planning portfolio. ’A heart attack, accident or cancer diagnosis, for example, are not planned events and they can happen to anyone, at any time. An event of this nature can leave a family significantly out of pocket if they don’t have gap cover in place.
“In the current tough environment, an unexpected medical expense shortfall can cripple a family financially.”
In terms of choosing which gap cover option is the right plan for you, Singleton says the medical aid option you have selected plays a vital role in which gap cover product would be best suited to your needs.
“Medical aid and gap cover should be aligned,” he says, adding that to ensure your gap cover option meets your needs it’s a good idea to speak to your financial advisor who can evaluate both your medical aid and financial needs and recommend the best product.
What you should be looking out for in your gap cover, he reveals, is strong service delivery from your gap cover provider. “While product benefits and pricing is one issue, it’s important your gap cover provider makes it easy to claim and that they assist you with queries, particularly around claims, as this can be a stressful time.”
Gap cover policies have a continuation capability without additional underwriting for your existing benefits, so it’ sa portable type of cover, he says. As such, it’s more important that your selected gap option aligns with your medical aid option, than where the gap cover comes from.
Medical inflation is increasing above normal CPI inflation rate which means the impact of a medical expense shortfall is going to be felt on an increasing basis on our overall financial planning in future.
“This could potentially lead to medical aid members dipping into their key savings to fund medical expenses unless they have gap cover to make up for the shortfall between what the health care provider charges and what the medical scheme funds,” says Singleton.