For many South Africans, a hospital visit brings more than just a health scare—it often results in a serious financial setback. Medical aid schemes increasingly cover only a portion of hospital and specialist costs, with patients left to pay co-payments and shortfalls when service providers charge more than the scheme’s approved rates.
This mismatch has led to greater reliance on gap cover, a financial product designed to bridge the difference. Yet, navigating the gap cover landscape can be complex—this is where financial advisors become indispensable.
Co-payments and shortfalls on the rise
As medical schemes shift more costs onto members, medical aid shortfalls are affecting a growing number of households. According to Brian Harris, General Manager of Operations at Turnberry Management Risk Solutions, “There is still a misconception that having a medical aid means you’re fully covered. But the reality is that co-payments and shortfalls are becoming the norm.”
Co-payments, which are non-negotiable expenses not covered by medical aids—similar to a car insurance excess—must be paid out of pocket unless covered by gap insurance. Over recent years, there’s been a sharp increase in these charges across all medical aid tiers.
What’s driving the surge in shortfall claims?
The rise in gap cover claims is closely tied to reduced medical aid coverage and increased co-payments. The most common claims involve musculoskeletal issues, maternity care, and gastrointestinal conditions. Alarmingly, cancer-related claims have also seen a notable rise—making up 12% of total claims today, compared to 8% five years ago.
Modern lifestyle factors such as stress, poor diet, and chronic inflammation are exacerbating health issues across age groups. As medical inflation continues to outpace scheme premium increases, the financial strain on members is expected to grow further.
Why financial advice is crucial
Selecting the right gap cover plan goes beyond comparing price tags. It involves a thorough assessment of income, existing medical cover, dependants, and anticipated health risks. “A good broker helps strike the right balance between affordability and protection,” Harris explains.
There’s no one-size-fits-all solution. An advisor’s role is to tailor gap cover to the individual’s broader financial situation—offering guidance that can prevent long-term financial damage.
Real stories show the impact of medical aid shortfalls
Recent stats from Turnberry highlight the potentially devastating cost of untreated or underfunded health conditions:
- A 44-year-old patient battling ureter cancer incurred over R678,000 in medical expenses.
- A 27-year-old with multiple chronic conditions claimed R478,000.
- A 54-year-old patient with lung cancer and chronic illnesses needed R450,000 in support.
- Even a 22-year-old facing spinal issues and skin cancer faced bills exceeding R414,000.
Without gap cover, these expenses would have left a lasting financial impact on patients and their families.
Medical aid shortfalls require proactive planning
The reality is that medical aid shortfalls are not going away. The most effective time to have taken out gap cover may have been in the past—but the next best time is now. As healthcare costs continue to climb, preparing financially is no longer optional.
Gap cover has evolved into a crucial component of personal financial planning. By working with a knowledgeable advisor, individuals can secure cover that shields them from crippling medical expenses while ensuring peace of mind in uncertain times.
Photo by: Kaboompics.com
