Why the Need for Gap Cover?

UNDERSTANDING THE BENEFIT OF GAP COVER

CompliMed has been involved in the gap cover industry from the very beginning. We understand the way in which this industry operates, from the way medical schemes look to limit their risk, to the way specialists charge for their services, to hospital networks and how they may apply co-payments, to the most important aspect, you the client and how you need to manage your potential financial shortfalls.

Since 2003 CompliMed has been an administrator, a product creator and a broker distribution agency to our own range of gap cover products. Although CompliMed is no longer involved in the administration and broker distribution functions of the past, we still provide the same CompliMed brand of gap cover direct to the public, by giving you access to our range of products through our website – www.complimed.co.za

Our new CompliMed website provides more than enough information for you to make an informed decision on what option may best suit your needs. Once you’ve made your choice you can proceed to purchase your policy online. Should you however still require the need to ask a question or two while on the website, the online chat facility will provide you with real time answers. Leave a message or make contact directly with us, we’re here for you.

Let’s have a look at the industry role players and how they all contribute to this product we call gap cover.

The healthcare industry

Years ago (prior to the year 2004), the healthcare industry had regulations that limited what a medical practitioner could charge for his services (MASA rate), and allowed the medical schemes to determine at what rate they were prepared to reimburse the practitioner for his services (BHF). During that period we became used to the term “contracted out” meaning that a medical practitioner charged more than what the medical scheme was prepared to pay. Although there was still a gap between the two rates back in those days, the gap wasn’t that significant.

Since 2004 the BHF and MASA rates have been done away with and replaced by the NHRPL. However, NHRPL in essence replaced the old BHF while no new rate was created to replace MASA. This meant that medical practitioners were now no longer restricted to charging in line with their industry rate, while medical schemes created their own internal rate based on the new NHRPL, to determine at what level they were prepared to reimburse at. The gap was created but at this stage was still relatively small and manageable to the average man in the street.

The medical schemes

Medical schemes have always been in a tight spot from the very beginning. How to create an affordable product that provides comprehensive medical cover to its members while employing a professional administration system to ensure service delivery efficiency. Negotiating with medical practitioners and hospital networks is one way of trying to contain their clients’ healthcare costs. But that was never going to be enough. Limiting the level of benefits they offered to their clients was another way. Applying co-payments and deductibles on certain procedures was another. So what a lot of medical schemes have done over the years is to negotiate with both the hospital networks and the medical practitioners to charge a rate that the scheme is happy to pay. These options are known as the network plans and it provides a cheaper option to clients who are comfortable to be admitted into a network hospital and be seen by a network specialist, rather than have the freedom to choose their own. Healthcare costs in general continue to rise and schemes will continue to find ways of trying to balance cost versus benefits.

Hospital networks

Private hospitals in South Africa appear to be a good business to be invested in. You’ve probably noticed in the area where you live or work that a new private hospital has been built recently or is in the process of being built. This is great news for members of medical aid schemes as your choice of what hospital to use has grown considerably wider. The latest hospitals look like 5 star hotels and they charge patients as if they were 10 stars! If the new hospital falls within one of the networks like Netcare or Life Healthcare then there is already an agreed rate with the medical schemes. However, some of the newer private hospitals do not form part of any of these established networks and will therefore not form part of the medical scheme’s network options. This means that if you’re on a network plan you will not be allowed to be admitted into one of these hospitals and if you insist, you could be liable for up to 30% of the total cost of your stay!

If you are fortunate enough to be able to afford a medical scheme option that allows you to visit any hospital irrespective of what network they fall under, then these newer private hospitals are available to you.

Medical practitioners

Although medical practitioners had a guideline (NHRPL) to use when setting their fees, there is no limit as to what they can charge. 10 years ago they charged 2 x the guideline, it then went to 3 x and when gap cover came into full swing, 4 x the guideline. Unfortunately we are finding that more and more specialists are requesting their patient’s gap cover policy details upfront, before determining what they will charge!?

The client

If you’re one of the fortunate few that can afford a medical aid then you should definitely have one. To not have one would mean that you would be limited to a public hospital only. Gap cover is an absolute necessity if you’re on a medical scheme. Whether you have a network option or an option that allows you access to any hospital, gap cover will provide the peace of mind knowing that when your medical practitioner charges beyond your medical scheme rate, that your policy will cover the shortfall. The only question you need to ask yourself is whether you need to be on a comprehensive medical aid option or whether you would be better served by downgrading to a basic hospital plan or network plan and buying a gap cover policy that will cover the potential shortfalls.