Wednesday, 17 April, 2024
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Drastic surge in medical gap cover

The medical aid industry is struggling to contain inflation, say experts, with insurance underwriters describing regular individual gap payouts to cover medical aid shortfalls of between R50 000 and R191 000. The latter figure is an annual regulated gap cover limit per beneficiary for hospital treatments.

They said that as medical scheme members age and as younger, healthier members buy cheaper options with fewer benefits, gap cover can total more than half of some patients’ medical aid payouts.

Sirago Underwriting Managers reports paying more than 100 “mega claims” (more than R40 000 per claim) in gap cover last year. Its gap cover claims between January and November 2023 amounted to R106m.

Pretoria broker Rudolph Ackermann said monthly gap cover claims were on average R1m higher than in previous years, reports BusinessLIVE.

Sirago CEO Martin Rimmer said individual gap cover payouts had increased from an average of between R6 000 and R12 000 to R50 000-plus on average over the past three years.

For musculoskeletal, coronary artery stents and ischaemic heart disease treatments, medical aids paid 46%, with gap cover required to settle the balance. All patients were members of top-end comprehensive medical scheme options.

Underwriters and brokers say even higher-end scheme benefit options that pay 200% are often inadequate.

A new website,, which compares options, is racking up 50 000 searches a month.

The health market inquiry recommended a regulated tariff ceiling for consultants, but Simon Strachan, CEO of the South African Private Practitioners Forum (SAPPF), said a tariff ceiling “often limits the possibility of a competitive market” and is a concern, with National Health Insurance (NHI) looming.

“We need a system that better represents what we’re doing: to work and be paid for teamwork in a multidisciplinary team. There’s no mechanism for that.”

Gap cover represents a small percentage of direct payments to preferred providers, he added. Consultancy fees in a private hospital usually amount to between 10% and 15% of the hospital bill, but suggestions that consultants are inflating their prices are “simply wrong”.

“The number of people on medical aid hasn’t increased significantly in 10 years,” he pointed out.

“More doctors are coming into the private sector because there are no posts in the state sector. The real free market forces are being curtailed by the market not growing – everybody is constrained.

“You have a duty to discuss payment options with your patient. I see nothing wrong in asking patients how they aim to pay for your services. One thing the SAPPF is clear on is that healthcare professionals should have a one-off fee, not one for prescribed minimum benefits (PMBs) and another for non-PMBs. You can decide whether to discount that fee. If you have gap cover, I should still charge you my regular fee.”

Strachan believes NHI won’t affect medical aids for at least two more decades and scoffed at NHI chief Nicholas Crisp’s assertion that NHI tariffs would be tailored to the quality of service and patient outcomes.

“The office for healthcare standards compliance is struggling to monitor facilities. How is it going to look at clinical outcomes? That requires a huge amount of input.

“The only way universal access to quality healthcare can be achieved is via a regulated private sector that can fund itself. A functioning private sector could then contract to the NHI for work and discuss fees. But if NHI becomes our only source of income, negotiated at the lowest cost, then we’ll need to see a huge amount of patients – with all the risks that entails for doctor and patient.

“Just look at the NHS (National Health Service) in the UK – doctors are on strike,” he said.

Angelique Coetzee, former chair of the South African Medical Association, advised people to “read the small print” in their gap policies, saying these kick in only after three days in hospital and aren’t regulated by the Council for Medical Schemes (CMS).

“As for medical schemes, they’re going to price themselves out of the market and become unaffordable,” she said. While there is is a tariff ceiling for preferred provider networks, consultants can charge what they like, she added.

“Also, don’t think scheme hospital authorisation means you’re automatically covered for everything; often you aren’t.”

Coetzee said GPs found that many patients were buying cheaper medical aid options that pay a GP between R170 and R350 for a consultation.

“(It’s) not viable to run a practice. We must meet our overheads. We’re going to see more sick people not accessing healthcare, and when they eventually do, it will cost a lot of money.”


BusinessLIVE article – Medical gap cover surges (Restricted access)


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HFA opposes proposed medical scheme tax credits’ removal


Time for hybrid healthcare solutions, expert warns medical schemes


Political meddling at heart of CMS low-cost medical aid delays



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