10 things to consider when choosing gap cover
MEDICAL schemes have a medical scheme rate, which is the maximum amount they will pay for a treatment. This rate differs depending on the medical cover you have, but it is typically a maximum of 200 percent of the scheme rate. Gap cover helps to cover the shortfall between the rate charged by medical specialists and the rate paid out by a medical scheme. Moreover, gap cover assists with the fees associated with co-payments, sub-limits and other medical expense shortfalls. Here are 10 things you should consider to ensure you choose the right gap-cover provider and make the most of your cover:
1 Have you changed or downgraded your medical scheme plan?
If you have changed or downgraded your plan since last year, you need to be aware of how your cover has changed. Often, a lower-cost plan will cover only 100 percent of the medical scheme rate, whereas a more comprehensive plan may cover 200 percent. In addition, different plans have different networks of hospitals and doctors that you must use. Familiarise yourself with these changes, and ensure you have gap cover in place to compensate for any benefit changes.
2 Has your medical scheme plan changed from last year?
Medical schemes update and change their plans every year, so your cover may differ from last year. It is essential you know what changes have been made and what these might mean for your medical-expense exposure for the year. Network hospitals and doctors may also have changed, so make sure you are still covered at your preferred providers, and that your gap cover is in place.
3 Does your gap cover complement your medical plan?
Gap cover can cover you only for things that your medical scheme covers, so it is essential to ensure that your gap cover complements your medical plan. It is also important to consider cover for sub-limits, co-payments and deductibles. Certain types of gap cover address medical expense shortfalls that occur as a result of you reaching your medical scheme’s sub-limit for a particular benefit, or because the scheme imposes a co-payment or deductible.
4 Does your gap-cover provider offer quick, easy on-boarding?
Once you have decided to incorporate gap cover into your insurance portfolio, and have selected the right cover for your needs, your gap cover provider should work with your broker to ensure a hassle-free on-boarding process, to ensure you and your family benefit from cover immediately.
5 What are the waiting periods?
Every gap-cover policy imposes waiting periods on new policyholders. These periods typically relate to pre-existing medical conditions. If you suffer from chronic, longterm conditions, it’s important to pay close attention to the waiting periods required by gap-cover providers.
6 Is your gap-cover provider customer-centric?
Make sure your gap-cover provider has your best interests at heart. Your provider should ensure that every aspect of its offerings and operations are fine-tuned to respond to what customers are looking for. In addition, your provider should be engaging with its broker network and listening to end-users. This will enable it to provide the best service and products to all its stakeholders.
7 Are you confident your medical expense shortfalls will be covered?
You and your financial adviser must have absolute confidence that your medical expense shortfalls will be addressed. Your provider should have a solid reputation and a strong financial position. It should also be constantly updating its products to stay one step ahead of the market.
8 Do you understand the limits of your gap cover?
Gap cover is subject to an overall annual limit of R157 000, which is the maximum amount that any gap-cover provider legally may pay out. In addition, gapcover policies have maximum rates. For example, a specialist may charge 7 400 percent of the medical scheme rate, but your gap cover may cover you for only 500 percent, which leaves you liable for the shortfall.
9 Does your gap-cover provider protect your overall annual limit?
Overall annual limit increases are subject to the Consumer Price Index and are capped at R157 000 for 2019. A big claim might use up this entire limit in one go, leaving you to cover any future shortfall for the year. Your gap-cover provider should do everything it can to protect this limit. This includes investigating whether claims should have been covered in full by your medical scheme as prescribed minimum benefits, and obtaining discounts from doctors.
10 Are your benefits giving you value for money?
Many of the benefits offered by medical schemes and gap-cover providers should be reviewed carefully to ensure that they are meaningful and will be used. Maximise your value by ensuring that your gap cover matches the medical expense shortfalls you are likely to need, without spending unnecessary money on features and benefits you don’t require.