Netcare. Picture: FINANCIAL MAIL
Netcare. Picture: FINANCIAL MAIL

Medical scheme members face an increasing risk of a large out-of-pocket payment if they don't abide by the rules of their schemes.

As demand for healthcare services rises along with costs, schemes are devising rules about which hospitals, doctors and other healthcare providers you can use, and are imposing limits on expensive procedures such as diagnostic scans and on treatment for cancer.

Insurers have stepped into the breach to offer protection against these shortfalls, but these policies are also complex to navigate, a survey released this week by GTC's head of healthcare consulting, Jill Larkan, shows.

The gaps you may face in your medical cover arise in four major areas:

• Doctors who charge higher tariffs than the scheme is prepared to pay - especially in the case of specialists whose services are in short supply;

• Co-payments charged by schemes as a way of getting you (or your doctor) to consider carefully if you really need certain high-cost services, or if you really want to use a provider, such as a hospital, that is not on the scheme's list;

• Cancer or oncology benefits that have an annual limit; and

• Benefits that are subject to sub-limits.

These are areas you should focus on if you want to use gap cover to mitigate the risk of a large out-of-pocket medical bill.

Gap cover is often significantly cheaper than moving to a higher medical scheme option that reimburses doctors at a higher rate or provides greater freedom of choice of providers - although if you are over 60 or 65 your gap cover premiums are likely to be age-rated and more expensive.

GTC's first annual survey of gap cover policies, released this week, provides a valuable comparison of the benefits and contributions on 84 of these policies provided by 20 insurers.

Here are seven things you may not know about gap-cover policies:

• Gap cover for the difference between what your scheme pays a doctor and what the doctor charges is available on a variety of levels of cover from 200% to 700% of the scheme rate. Many schemes pay only the scheme rate (confusingly represented as 100% of the scheme rate), but doctors typically charge more - anything from 150% to 700% of the scheme rate. The most popular level of cover provided by policies is 500%.

Check the fine print

When you are choosing a level of gap cover, check the wording of the policy - some cover you for the difference between what your scheme pays and what your doctor charges up to the level of, for example, 500%.

Others cover you for an additional level above what your scheme pays. So for example, if your scheme pays 200% and your policy provides an additional 300%, you will be covered if a doctor charges 500%, Larkan says.

• Although cover ranges up to R600 for an individual and more for families, the cheapest cover costs just R63 a month and provides you with an additional 200% of the scheme rate for doctors who treat you in hospital.

Despite this, only some 550000 families have gap-cover policies, although medical schemes have more than eight million members.

• The cheapest cover is that which covers the difference in the rate at which your doctor is reimbursed, but some policies also cover co-payments and offer enhanced oncology benefits and sub-limits. Some policies offer cover for all of these benefits and some a combination of one or more of them.

• If your medical scheme excludes a benefit, you cannot claim for it under your gap-cover policy - the gap-cover policy can only enhance your medical scheme benefits, Larkan says.

This means if you join a scheme that provides cover only for hospital admissions and the chronic conditions listed as prescribed minimum benefits, you cannot claim on your gap-cover policy for expensive out-of-hospital procedures or treatments.

• Since the demarcation regulations took effect, largely from January, gap-cover providers are allowed to charge you according to age, Larkan says. Some providers have a range of age bands, but most have one premium for everyone below a certain age, anything from 60 to 70 years old, and a higher one for those above that age.

Older, wiser, poorer

Larkan says as long as you join before the maximum entry age most providers will charge the lower premium even after you reach the maximum entry age. A few providers increase your premiums when you reach their maximum age.

Larkan says the premiums for those who join after the maximum age are significantly higher than for those who join at younger ages as the claims submitted by older policyholders are much higher.

• Many schemes offer to reduce your contributions if you make use of certain hospitals with which the scheme has negotiated favourable tariffs. But if your chosen doctor does not operate at that hospital you may incur a co-payment.

Some gap providers are offering cover for co-payments for not using a network hospital. But mind the Ts and Cs and combinations of these. Some have a limit of anything from R2000 to R12000 on this benefit, some have a limit per claim, and some restrict the number of such claims per person covered - usually one or two claims a year.

• Gap-cover providers offer a lot of additional benefits - anything from cover for the cost of being treated for an emergency in a casualty ward to trauma counselling and premium waivers if you die or are disabled.

In-hospital dentistry after an accident, for impacted wisdom teeth and for dental implants, is now also covered by some gap-cover policies as schemes often cut these benefits to contain costs.

Given the increase in the prevalence of cancer, two add-on benefits that providers offer which could prove useful are lump sums for the first cancer diagnosis - 25 of the 84 plans GTC surveyed offer a lump sum ranging from R5500 to R50000 for this - and cover for biologics.

These protein-based therapies are derived from living cells and have revolutionised the treatment of certain cancers, but at a high cost. Of the 55 plans that provide cover for cancer, 35 offer benefits for biological drugs.

The GTC gap cover survey winners

Sanlam and Absa have emerged as the best providers of top-up or gap-cover medical insurance, in a survey of 20 providers conducted by GTC.

Sanlam's Comprehensive Gap Cover policy, at R250 a month for an individual or a family, was ranked as the leading provider of gap cover for those under the age of 60, while Absa Gold, at R435 a month for an individual or family, scored best for cover for those over 60.

The two providers provide cover for when your scheme short-pays the doctor who treats you in hospital - of up to 500% of the scheme rate - and provide cancer, co-payment cover and sub-limit enhancements up to the maximum benefit of R150 000 a year.

The so-called demarcation regulations under the Insurance Acts limit benefits on gap or top-up cover policies to R150 000 per person a year.

Insurers say most claims are lower than R150 000 per person, but there are always exceptions.