GTC, a leading wealth and advisory firm, recently conducted a survey to identify the top gap cover plans currently available in South Africa. They identified 20 gap cover providers, offering 84 different plans. Upon analysis of these plans, they discovered there were 18 categories centred around four core categories.
Jill Larkan, head of Healthcare Consulting and Thought Leadership at GTC, says that the 2018 GTC Gap cover survey is by no means an exhaustive list of providers, but includes the gap cover providers known to GTC, its clients and competitors.
The reason for this survey is simple. “People need to have the information available so that they are able to make informed decisions when it comes to their healthcare.”
The purpose of gap cover
Larkan says gap cover is available to anyone and the maximum waiting period is limited to 12 months for pre-existing conditions.
So how does gap work? Let’s look at a scenario. You are booked into hospital with appendicitis. Your medical aid covers your hospital stay, doctor’s fees, anaesthetist's costs, medicine and supplies. However, your medical aid will only cover a certain percentage depending on your plan – in this scenario it covers 100%.
This means if your doctor and anaesthetist charge a rate at 300%, you will be liable for the shortfall of 200%. That’s where gap cover comes in – it covers the shortfall so that you are not affected financially.
Sanlam and Absa emerged as the top-ranked gap cover providers in South Africa.
Sanlam offers the best value for money to people under the age of 60 – their Comprehensive Gap Cover costs approximately R250* per month per individual or family.
While for individuals (or families) older than 60 years of age, Absa came in top – their Gold Plan costs approximately R435* per month.
Both plans offer comprehensive cover – gap, co-payment, oncology and sub-limit in the 500% sector.
They used these four core benefits to rate the various plans:
- Gap cover: in-hospital gap cover and percentage cover the scheme provides (weighted 60%)
- Co-payment benefit: the provision of a co-payment benefit (weighted 13.3%)
- Oncology cover: the provision of additional cover for cancer (weighted 13.3%)
- Sub-limit benefit extender: provided to enhance sub-limits imposed by medical aids (weighted 13.3%)
In addition, plans were grouped into sectors based on the level of cover offered: 200%, 300%, 350% or 500%+.
“The most popular type of plan, according to the survey, is one which offers in-hospital gap cover, co-payment, oncology and sub-limit, to the level of 500% +,” says Jill Larkan, head of Healthcare Consulting and Thought Leadership at GTC.
“These plans offer cover to approximately 550 000 families, representing a small portion of the potential medical aid market which has in excess of eight million members.”
Here are other companies that did well, based on the highest core ratings and premiums:
Top 6 best core performers’ premiums, under 65s, individuals and families
1. Sanlam Comprehensive Gap Cover – R250 (R600 for over 60s)
2. Absa Gold – R315
3. Zestlife Universal – R327 per individual under 55 (R413 over 55s); R413 per family
4. KaeloXeulus Fusion – R350
5. Ambedown Gap Select – R390
6. Ambedown Gap Supreme – R420
Top 6 best core performers’ premiums, over 65s, individuals and families
1. Absa Gold – R435
2. Zestlife Universal – R470
3. Ambedown Gap Select – R585
4. KaeloXeulus Fusion – R600
5. Sanlam Comprehensive Gap Cover – R600
6. Ambledown Gap Supreme – not available to over 65s
Limited at R150 000 – is that a concern?
The National Treasury recently introduced a maximum gap cover limit of R150 000 per member per year. Fortunately this has not affected the industry just yet, says Larkan. But it could, as costs continue to rise.
“One of the survey participants noted that its highest single claim pay-out in 2016 was R122 584, which means that while R150 000 still appears to be sufficient, this level will be breached in the foreseeable future,” she says.
Justin Savage, director at KaeloXelus, told GTC that a recent claim was received in excess of R500 000 for an oncology shortfall.
Check your cover
Many schemes have started to implement age-related premiums from 1 January 2018, so Larkan says it’s important you check the fine print in your policy.
Gap cover also covers more than you realise. Larkan says it will offer cover in addition to many things that your medical aid would normally pay for. Take an emergency visit to the ER, for example. If you have a medical aid with a Medical Savings Account, you would be able to claim this visit from your savings. On many of the top-up plans, you will then be able to claim a reimbursement for this trauma/emergency room visit.
The same would apply for out-patient procedures such as MRIs, CT scans, chemo, radiotherapy and kidney dialysis. Check your policy wording to make sure you are covered.
But take note: If your savings account is depleted, some gap covers may reject your claim and would not cover the short fall giving the reason that "top-up/gap covers may not perform the function of a medical aid, merely top it up".
Larkan warns that if something is excluded from being covered by your medical aid, gap cover won’t cover it either – for example cosmetic surgery or fertility treatments.
“If you have a hospital plan, however, many out-of-hospital benefits won’t be covered as these plans only cover you for procedures when you are admitted to hospital,” Larkan adds.
Larkan’s take-home message is simple: Understand what you are covered for and, if you are unsure, speak to a consultant who can advise what cover you and your family need.
*Pricing was correct at the time the 2018 GTC GAP Cover Survey was conducted.
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