Has the Gap Cover Controversy Cover been Resolved?
- Yes, for now medical gap cover will continue
- Medical gap cover isn’t seen as a threat to medical aids – ie. offering the same products
- Medical gap cover doesn’t cover anything your medical aid doesn’t cover
- Today gap cover continues to pay the shortfalls on approved procedures
- Read your policy to understand limitations and exclusions with gap cover
- You have to belong to a medical scheme to be able to buy gap cover
- Demarcation regulations stipulate what contracts fall under the Long- and Short-term Insurance Act as health policies
Safeguarding Medical Aid Consumers?
Medical insurance products and gap cover have been a controversial topic for years.
National Treasury issued the release of the final Demarcation Regulations. This was the outcome of a consultative process between certain authorities. The aim was to make insurance products such that they don’t lure people away from medical aids.
Three categories of these health insurance products apply to this demarcation. They are hospital cash plans, primary healthcare insurance policies and gap cover plans.
The Government’s job was to ensure that there was clear demarcation between medical aid and medical insurance.
The final draft took effect in April 2017. It means that gap cover will also undergo underwriting requirements. They will also have certain waiting periods for various specified conditions.
These gap cover plans cover the shortfall between medical scheme benefits and what specialists charge. They may not sell gap cover to anyone not belonging to a medical aid scheme.
End of Controversy – Gap Cover Lives on
The Demarcation Regulations provided clarity on what type of cover wasequal to that of a medical aid and what insurance policies actually were. National Treasury doesn’t welcome the idea that young people are taking out more affordable health insurance as an alternative to medical scheme cover.
The problem comes in that medical schemes are relying on the cross subsidisation of the young so as to fund the benefits of those in need.
All medical schemes must cover members for a range 270 medical conditions and 26 chronic illnesses. These are known as PMBs or prescribed minimum benefits. The cover offered by medical scheme is more comprehensive but the problem lies with the affordability of the these medical aids.
Health insurance products are attractively low, but they don’t offer the products that a medical aid does, and for these additional products, there’s a hefty price tag.
Trying to Ban a Much Needed Product
To protect medical scheme membership, the idea was to outlaw health insurance products so that young people would have no choice but to opt for medical aid. Gap cover products were under scrutiny even though being a member of a medical scheme is a pre-requisite for buying gap cover. Just doesn’t make sense.
Things have changed though and Treasury is allowing limited hospital cash plan cover and gap cover to continue.
So for now, gap cover will remain, and in fact every medical aid member certainly shouldn’t be without it.
Into the Future with Gap Cover
Gap cover gives you the peace of mind that you don’t have to pay large sums of money to cover hospital bills not paid for in full by your medical aid. With low premiums and fairly extensive cover, South Africans can be glad that the controversy surrounding gap cover had been laid to rest for now.
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All info was correct at time of publishing