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Medical gap cover gives 100% peace of mind

21 February 2012 Stratum Benefits

For the consumer, private medical insurance can be a bewildering terrain of co-payments, shortfalls, limitations, self-payment gaps and so-called ‘savings’ accounts, to name only a few. One thing that we all soon find easy to grasp, though, is that there

This is why the market for gap cover is growing so fast in South Africa. Completely independent from the mainstream medical aid policies, with monthly rates starting at well under R100 per family per month, medical gap cover can give consumers 100% peace of mind.

Medical gap cover pays for the shortfalls that may be incurred in hospital for treatment from attending specialists and physicians. It can also apply to the co-payments or pre-admission payments that are required in certain instances.

Shortfalls arise from the difference between medical aid rates and specialist private rates: medical aids determine a baseline tariff for each procedure, however, specialists are free to charge more - and many of them charge up to 500% more - than this baseline. While the medical aid will pay the baseline amount, the patient has to foot the unwelcome bill for the rest.

One example is the routine Caesarean Section. Many gynaecologists charge about R12,000 for the procedure, which is a 300% mark-up on the rate of around R4,000 set by some medical aids. That leaves the patient with a shortfall of R8,000. In most cases, a C-section is an emergency procedure, and parents can’t stop to consider the shortfall cost when the life of their baby is at stake.

This is where gap cover comes in because shortfalls for in-hospital treatment can occur no matter which medical scheme you belong to.

One of the first few companies to launch gap cover in South Africa was Stratum Benefits, which took the courageous step of launching the company with zero clients in 2006. Stratum MD, Marco Fonto, was determined to bring this high value product into the open market. Since then, awareness of the benefits of gap cover has grown exponentially. There are many companies now offering gap cover and Stratum itself has signed up more than 30,000 members.

Gap cover comes in a number of different packages to suit the many different needs of consumers and the countless variations in medical policies. Stratum offers independent cover which applies to any of the over 50 registered medical insurance schemes it partners with. The company offers more than six products, ranging from Stratum Comprehensive and Stratum Elite, to their Hospital Extender Plan, In Hospital Gap 500, In Hospital Gap 300 and In Hospital Gap 500 Senior plans.

The 300 and 500 categories refer to how much of the gap will be covered. With the medical aid baseline calculated at 100%, a 300 category will cover the shortfall up to 300% of the tariff (i.e. 3 times the stated medical scheme tariff) and a 500 category will cover the shortfall up to 5 times or 500% of the tariff. So, for example, subscribing to the In-Hospital Gap 300 plan (at R75 per family a month) would ensure that the parents above will be covered for the full R8,000 shortfall for the Caesarean Section that will save their new baby’s life.

Deciding what gap cover plan is right for you and understanding how it works is not easy, given that medical aid has become so complex. Most consumers prefer to be guided by a broker to understand their policies and choose a solution that best suits their needs. Brokers play a pivotal role in the gap cover sector. They build relationships with their clients and ensure that each member derives the best possible benefits.

Stratum uses its extensive network of brokers to provide client support, such as explaining the details of the insurance policy, admission to hospital procedures, admission number, planned vs. emergency admission, payments, bills, how the medical aid will deal with it, and much more.

A principal feature of a gap cover policy should be that it is easy to use and that payment is made promptly to the patient. Because claims for gap cover are usually lodged by patients who have already been hospitalised, the claimant may be under financial pressure and experiencing considerable anxiety. Stratum asks claimants to submit their medical scheme remittance statement and complete a 1-page submission form. It then pays the refund amount directly into the client’s account, no later than the 3rd of every month.

With the support of a broker and the right gap cover at a nominal cost per month, consumers can indeed enjoy the assurance that if they end up in hospital, there will be no shortfalls for them to pay.

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