Gap Cover vs. Regular Insurance: What’s the Difference?

When it comes to protecting yourself financially, understanding the difference between gap cover and regular insurance is essential – especially when it comes to healthcare expenses.

While both aim to safeguard you from high costs, they serve very different purposes. Our latest blog breaks it down so you can decide if gap cover is the right solution for you.

What Is Gap Cover?

Gap cover is a type of insurance specifically designed to bridge the gap between what your medical aid pays and what your actual medical expenses are. Even with the best medical aid plan, you can still face significant out-of-pocket costs like:

• Hospital co-payments
• Fees charged by medical specialists that exceed your medical aid’s rates

Medical specialists and service providers often charge multiple times more than the medical scheme tariff, leaving you financially responsible for the difference. Gap cover steps in to cover these shortfalls, ensuring you’re not left out of pocket for expensive in-hospital treatments or certain out-of-hospital procedures.

Gap Cover vs. Regular Medical Aid

Medical Aid

Medical aid is your primary healthcare insurance. It covers a wide range of medical expenses, including:

• Doctor visits
• Chronic medication
• Hospital stays
• Emergency care

However, medical aids have limits on what they cover. For example, they may only reimburse you at 100% or 200% of their scheme tariff, while specialists can charge much higher rates, sometimes up to 500%. Additionally, medical aids impose co-payments on certain procedures, leaving you responsible for the rest.

Gap Cover

Gap cover is a secondary insurance product designed to complement your medical aid. It won’t replace your medical aid but will help with costs your medical aid doesn’t fully cover.

It is particularly useful for:

• In-hospital treatments and procedures
• Certain defined out-of-hospital procedures
• Covering the difference between what your specialist charges and what your medical aid pays
• Helping to cover co-payments

Key Difference

While medical aid provides broad healthcare coverage, gap cover focuses specifically on filling the gaps left by medical aid, particularly for high-cost treatments and specialist fees.

Why Is It Important?

Even with medical aid, out-of-pocket expenses can add up quickly. According to the Council for Medical Schemes (CMS), out-of-pocket payments by medical aid members increased from R29.8 billion in 2016 to R36.7 billion in 2021:a staggering 23% increase over five years.

These costs often include:

• Co-payments on scans, scopes, or surgeries
• Specialist fees exceeding medical aid rates

Without gap cover, you may be forced to pay these expenses out of your own pocket, which can be financially overwhelming—particularly for costly procedures.

What It Does Not Cover

It’s important to understand that gap cover doesn’t cover everything. Some common misconceptions lead to frustration among policyholders, so here’s what gap cover does not typically include:

• Day-to-day expenses like GP visits or over-the-counter medicine
• Shortfalls after your medical savings account is depleted
• Expenses for routine checkups or chronic medication

Gap cover is primarily designed for in-hospital expenses and certain defined out-of-hospital procedures, not general day-to-day medical costs.

How Does It Work?

Imagine this scenario:

• You’re admitted to the hospital for a necessary procedure, and your medical specialist charges you R60,000.
• Your medical aid only reimburses up to R40,000, based on their scheme tariff.
• You’re left with a R20,000 shortfall.

Without gap cover, you’d have to pay that R20,000 yourself. With gap cover, however, the policy steps in to bridge the gap, leaving you financially protected.

Additionally, this type of cover may also help with co-payments that medical schemes impose on certain procedures, such as MRIs, CT scans, or scopes.

Is It Affordable?

One of the greatest advantages is that it’s an affordable solution to boost your medical scheme coverage. For a relatively low monthly premium, you can protect yourself from high, unexpected medical costs.

Why You Need Both Medical Aid and Gap Cover

Medical aid on its own is not always enough, especially when medical service providers charge far above the scheme tariff or when co-payments apply. Gap cover ensures you’re not caught off guard by unexpected costs, giving you complete peace of mind.

How Can We Help?

If you’re looking for a cost-effective way to enhance your medical aid plan and reduce financial stress, this type of cover might be the solution you need.

Contact us today to learn more about how it can help you bridge the gap between what your medical aid pays and what you’re charged.