How medical aid regulation changes are shaping the future demand for gap cover

Medical aid remains essential for accessing private healthcare in South Africa, but it does not always cover the full cost of treatment.

While regulations such as Prescribed Minimum Benefits (PMBs) ensure that members have access to a defined level of care for certain conditions, medical schemes still apply tariff limits, treatment protocols, co-payments and other funding rules that can leave members exposed to out-of-pocket costs. At the same time, healthcare costs continue to rise, placing additional pressure on how schemes fund treatment. As a result, medical expense shortfalls are becoming increasingly common, making gap cover an essential part of helping clients manage their healthcare costs and protecting them against unexpected expenses.

Protection within limits
PMBs are a clear example of how scheme rules and funding limits influence what medical schemes ultimately pay for. They are designed to ensure that all medical scheme members have access to treatment for a defined list of emergencies, chronic, and life-threatening conditions. However, they do not provide unlimited funding for every treatment option, and there is often a misunderstanding about this.

When it comes to PMBs, cover is still subject to scheme rules, treatment protocols, formularies, and designated service provider requirements. In many cases, cover is also aligned to the level of care that would ordinarily be available in the public healthcare system. This becomes particularly important in areas such as oncology, where newer or more specialised treatments may fall outside what a scheme is required to fund in full.

As a result, members may still face co-payments, sub-limits, or shortfalls that need to be paid for out of pocket, even when the condition itself qualifies as a PMB.

How scheme rules create shortfalls
PMBs are only part of the picture when it comes to medical expense shortfalls. Even where treatment is covered, medical schemes reimburse according to their own tariffs and funding rules, while healthcare providers may charge significantly more. The difference between what the scheme pays and what the provider charges is the member’s medical expense shortfall.

At the same time, medical schemes use co-payments, benefit limits, Designated Service Providers (DSPs) and authorisation requirements to manage rising healthcare costs and keep contributions affordable. If these rules are not followed, or if treatment falls outside the approved funding structure, members may still need to pay part of the cost themselves.

This means that having medical aid does not always guarantee that treatment will be covered in full. Even where treatment is approved, members can still face significant out-of-pocket expenses.

Advice is essential
As funding rules become increasingly complex, advisers need to take on a more proactive role in helping clients understand and navigate the healthcare landscape. Many clients do not fully understand how PMBs, DSPs, funding rules and scheme tariffs affect what their medical aid will ultimately pay. The reality often only becomes clear at the claims stage, when members discover that they are responsible for part of the cost themselves.

Explaining these rules clearly, together with where medical expense shortfalls may arise, is therefore becoming an increasingly important part of the healthcare funding discussion. Regular reviews and clear guidance also help ensure that changes to scheme rules, benefits, and healthcare costs do not leave clients exposed to unnecessary or unexpected out-of-pocket expenses.

Future-proofing healthcare advice
Medical aid and gap cover should not be treated as once-off decisions. Scheme rules, pricing structures and healthcare costs continue to change, which means healthcare advice needs to be reviewed regularly to ensure that cover remains appropriate.

Helping clients understand how their medical aid works, where medical expense shortfalls may arise, and how gap cover can be structured forms an important part of responsible advice. Regular reviews also help ensure that changes to benefits, family circumstances or healthcare needs do not leave clients exposed to unnecessary costs.

As regulation continues to shape how healthcare is funded in South Africa, gap cover is becoming an increasingly important part of managing healthcare costs. Brokers and financial advisers play an essential role in ensuring their clients have medical aid and gap cover that together provide the right level of protection.