Gap Insurance Approval

It saddens me when I read articles like this as I believe that instead of South Africa sorting out the problem of hospitals and medical practitioners over charging, South Africa's having to introduce GAP-COVER insurance to cover the difference between medical costs and what the insurance companies are acutally covering... Read on.

According to South Africa's Business Times news paper, the court ruling gives the green light to gap insurance that covers shortfalls in medical cover.

The recent supreme court judgment, giving insurance company Guardrisk the go-ahead to ofer Admed a gap-cover product that covers the shortfall between medical aid rates and actual health costs, was hailed as a victory for consumers. Last week's judgement follows a lawsuit, lodged by the council for medical schemes, which took issue with Guardrisk's admed product, claiming that the company was enroaching on the business of medical schemes as defined by the medical schemes act.

Anita De Jongh, communications manager at leading corporate healthcare consultancy Optivest Health Services, said, the perception when looking at hospital benefits was paid by medical scheme, was that they would cover 100% of members accounts. "The reality is that the members in most cases, experience a shortfall between what the medical scheme pays for and the actual charge by the services provider.The reason is that the services providers are allowed to charge more than the rate covered".

In the case of hospitalisation the size of the shortfall could spell financial ruin for many South African families. She says that the gap cover add-on should be regarded as a positive to the medical aid industry.De Jongh said that certain hospital and comprehensive medical aid plans cover 100% or 200% of the National Health Reference Price List rate for hospitalisation, while actual costs could be more than 300%. These products can cover this shortfall. Mike Krann general manager of financial advice portal ThinkMoney.co.za said that the reason people took the gap cover was because they chose a medical aid company that did not really meet their needs. (BOLLOCKS!!!!!). "If you choose the right medical cover upfront the cover would amount to the same thing", he said.

However, De Jongh pointed out that signing up for the option within your medical scheme, that covers 300% of the NHRPL rate, would definately cost more that purchasing gap-cover insurance.