Discover how gap cover can safeguard South Africans from the rising costs of medical care and unexpected expenses, ensuring financial security in times of need. File photo.
The increasing costs of medical care and diminishing benefits offered by medical schemes are leaving South Africans with unexpectedly high medical bills. Gap cover, an insurance product that covers in-hospital costs not covered by medical aid schemes, has become essential to mitigate co-payments and shortfalls in medical treatment payments.
Specialist healthcare insurance and medical aid brokers warn that gap cover bridges the gap between what medical schemes cover and what medical practitioners actually charge. This gap is expected to widen further as medical practitioners increase their fees, with specialists typically charging 200-300% and some charging up to 600% or more of the medical scheme tariffs.
This challenge comes amid a low-to-zero South African household savings rate and rising living costs, making it difficult for families to manage large unexpected expenses without incurring debt.
Tiago de Carvalho, CEO at Ambledown, highlights the financial risk posed by this growing gap. "In 2025, our analysis shows medical providers will likely increase tariffs by 6% to 8.5%. The rising complexity of surgical interventions and multiple procedures for the same condition have sharply increased costs," he says.
Westley van Rooijen, Co-Founding Partner at Austen Morris Associates, says: "We went through medical aid plan renewals and saw some schemes marginally increasing rates but reducing certain benefits. Others increased scheme contributions by between 9 and 12%."
As medical scheme contributions rise, many cash-strapped consumers are forced to downgrade to cheaper plans with less cover. Devan Moodley, regional manager – Healthcare at NMG Benefits, says: "Appropriate medical scheme coverage should ideally be determined by a detailed needs analysis. However, in most cases, it's primarily driven by cost, which often serves as the main obstacle to access. While gap cover is recommended regardless of the option you select, the gaps on more affordable basic plans tend to be more significant. As a result, gap cover becomes crucial."
The brokers emphasise that without gap cover, patients and their families can face deep financial trouble when illness or accidents occur. A key concern is the high costs of cancer treatment. Moodley says, "These new treatments can be life-saving, but the medical schemes either don't cover them at all or they give patients huge co-payments."
Van Rooijen shares, "If an aggressive treatment plan is recommended, with specialized, designer biological drugs, patients can reach their 12-month cycle limit in as little as four months. One of my clients, confronted with a 20% shortfall on her drugs, which cost R45,000 a month, was deeply concerned about the impact these costs would have on her children's school fees. She was afraid she would have to take loans to continue her treatment. However, her Ambledown Select Gap Cover is covering the shortfall and saving the family from financial ruin."
Matipwili, head of Sasfin Health Consulting, also notes an increase in gap claims for cancer co-payments. "This is the co-payment applicable once the Oncology benefit threshold is reached. Depending on the Oncology treatment that the member is on, the claims can range from R3,000 to R23,000 per cycle“.
Beyond cancer, other medical costs also pose significant challenges. Moodley cites the example of a young woman who had four children in six years, who calculated that she would have been liable for over R100,000 had she not had gap cover. Matipwili shares, "One member faced multiple medical conditions, including kidney stones, a joint replacement, and a heart condition, within 12 months. Thanks to his gap cover, he recovered R21,100 in out-of-pocket expenses."
Van Rooijen points out that many people are opting not to undergo necessary procedures due to high costs. "Prostheses such as replacement hips can cost as much as R80,000, which is not always covered by medical schemes. Depending on the gap cover selected, the shortfalls in payment for prosthetics and procedures may be covered."
Choosing the right gap cover can be challenging, with over 200 medical scheme plans and gap cover products available. Van Rooijen says the need for expert advice, saying: "You need a broker with expertise to help dissect the medical aid options, find shortfalls, and identify areas that need top-ups with gap cover, and balance these with the individual’s budget."
Matipwili says: "It's essential that brokers educate members on the distinction between having unlimited hospital cover on medical aid and ensuring all in-hospital medical expenses are fully covered. By having gap cover in place, members can protect themselves against unforeseen medical expenses, ensuring financial security and peace of mind."
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