Evaluate the benefits of your medical policy

The entry of more players into the market following certainty about the regulation of gap cover has increased competition among providers of these policies — but it has also introduced greater complexity.

Some of the key benefits you need to evaluate are:

The rate at which your policy pays for gaps in tariffs

Gap cover policies cover shortfalls in the tariff your scheme pays a doctor compared with what the doctor charges. They range from 200% to 700% of your scheme’s reimbursement rates.

Tiago de Carvalho, the CEO of Ambledown Financial Services, says 60% of doctors charge an average of 4.8 times the scheme rate.

If your doctor charges 4.8 times the scheme rate, your scheme pays at 100% of the rate and your gap cover provider pays an additional two times the scheme rate, you could still be out of pocket to the tune of 1.8 times the scheme rate.

Joanne Gloag, executive for Admed, says Guardrisk decided in January to pay an additional two times the rate the client’s scheme pays — so if your scheme pays 100% of its rate, your policy will pay an additional 200%, giving you cover of 300% of the scheme rate. If your scheme pays 200% of its rate, your Admed policy will pay another 400%, giving you cover up to 600%.

She says this is an attempt to stop doctors from charging as much as gap cover policies pay, for example, up to 500% of the scheme rates.

Gloag says 8% of policyholders have been left with shortfalls this year, but the move has reduced premium increases from 25% for 2017 to 9.4% for next year.

Enhanced sub-limits

If your medical scheme has sub-limits, such as R40 000 for a shoulder prosthesis, you could benefit from cover that enhances the sub-limit — for example, you may enjoy a further R20 000 on any rand amount set as a sub-limit.

Cover for co-payments

More comprehensive gap cover policies offer cover for the co-payments that schemes typically apply to procedures such as spinal surgery, joint replacements, colonoscopies or MRI and CT scans.

Marco Fonto, MD of Stratum Benefits, says co-payments on big schemes like Discovery Health and Bonitas have increased steeply in the past three years.

Schemes are also increasingly setting up hospital and doctor networks that you must use to enjoy cover in full. Some gap cover policies will cover your co-payment when you choose not to use the provider specified by your scheme. Others, like Admed, do not.

Gloag says providing cover for these copayments undermines schemes’ attempts to contain costs and increases gap cover premiums. Admed will pay the shortfall arising when you use a network hospital and surgeon but another specialist, such as an anaesthetist, charges more than the scheme pays.

Out-of-hospital procedures

A number of procedures are now performed on an out-patient basis, in day hospitals or in doctors’ rooms, and if not covered in full by your scheme you can still incur high costs. Gap cover providers typically list these procedures, such as coronary angioplasty, sinus surgery, tonsillectomy, kidney dialysis or gastroscopy. Compare the lists across providers or ask a financial adviser to check that the important procedures are covered.

Cancer benefits

Medical schemes are limiting cancer benefits in order to contain their costs.

South Africa’s largest medical scheme, Discovery Health, for example, pays cancer claims in full to a maximum of either R200 000 (the bulk of the scheme’s members) or R400 000. Thereafter benefits are unlimited but a 20% co-payment applies.

Many gap cover providers now offer a once-off dread disease benefit on diagnosis of cancer as a “rider benefit” on the policy. These benefits are not included in the R150 000 benefit limit on the policy and amounts offered vary widely and payment may be subject to conditions.

Exclusions

Some providers exclude cover for any procedure or treatment that your scheme does not cover. Most gap policies exclude cover for claims that arise from the likes of self-inflicted injuries, suicide attempts, cosmetic surgery and taking narcotics.

Participating in hazardous sports, military or police duty, aviation other than as a passenger, or any race or speed test is also typically excluded. Depression, mental illness, dementia, home-based care and stressrelated conditions may also be excluded.