However, when people buy health cover they’re very seldom told to mind the gap. I always try to make it very clear to my clients that the gap in their cover exists and that there will always be a shortfall in the medical plan payouts for in-hospital costs, but this fact is so quickly lost in the multifariousness of all the other ‘more important’ considerations within a well-balanced financial portfolio. There is no one constantly reminding you to ‘mind the gap’.
For those of you who have travelled on a tube in London, you’ll know the familiar sound of the lady saying “Mind the gap.” as you step on and off your tube. In fact, even if you haven’t travelled to the Big Smoke, you’ve probably heard about it.
Gap cover is an insurance product that aims to cover the potential shortfall that arises from the charges of doctors and specialists for in-hospital procedures, who often charge up to 400% of NHRPL (or scale of benefits as previously known). If your medical aid only pays out at 100% then you will encounter this potential shortfall.
The National Health Reference Price List (NHRPL) is a pricing system that is maintained by the Department of Health and the Council for Medical Schemes. The NHRPL specifies the rates to which all medical aid schemes must adhere. It is the amount of money that they are legally bound to pay for a given situation.
Doctors, hospitals and other medical service providers however, are not bound to these rates, and in fact charge up to 400% above these NHRPL prices. So despite thinking you are financially covered for any medical eventuality in its entirety, for the most part you are not, and will likely be liable for a shortfall.
Another misconception exists that GAP cover is part of your medical plan (medical aid/hospital plan), but it’s not. GAP is a separate product that will be deducted as a separate item on your monthly statement, making it easy to check if you have GAP cover. GAP does not cover outpatient expenses, so, for day-to-day medical costs and consultations with a doctor, you would need to refer to your medical plan.
Gap cover is not just another sales gimmick for financial planners to earn more money. In fact, most planners don’t make any money off these products at all as we sell them purely as a value-adding service to our clients.
The value of having GAP cover far exceeds the cost and provides additional peace-of-mind. If you’d like to find out if you already have GAP, how much GAP you need or simply wish to review your portfolio, then let’s chat!