It is easy to think that the terms Medical Aid, Medical Insurance and GAP Cover refer to the same thing. Although they all serve to help you afford medical care, there are some subtle differences.

Getting a clear understanding of these words will help you get savvy with your options. If you already have health coverage you’ll be more informed about the benefits and extent of your health plan. However, many of us sign up for this type of cover, but over the years (especially if we don’t claim often) we can easily forget the massive role that these products play in our financial portfolios.

Medical Aid or Medical Insurance, it’s all medical cover, right?

Yes and yes. But, one of the key differences is that medical insurance products are not governed by medical aid regulations. In 2018, updated Demarcation Regulations stated the following:

• Medical aid schemes fall under the Medical Schemes Act No. 131 of 1998.
• Medical insurance products are governed by the Short-term Insurance Acts No. 53 of 1998.

The guidelines of these laws actually play a crucial role as they differentiate the offering and extent of the cover of these two types of medical cover.

For instance, medical aid schemes are required by law to pay in full for Prescribed Minimum Benefits - a.k.a PMBs. The payment may be limited when you go to a doctor who is not on your medical scheme’s designated service provider network (the one they choose for you).

They’re not required to offer funeral cover, personal accident disability or cover for any loss of limbs.

Moreover, payments of in-hospital benefits are made based on the National Recommended Price List and healthcare professionals use this price list to determine the base price of their services.

In addition, there may also be yearly limits for procedures.

How does medical insurance differ?

The purpose of medical insurance is to protect your financial assets as well as promote a lifestyle of health and wellness. It is considered more affordable because it mostly focuses on out-of-hospital expenses including prescribed medication and meetings with your GP, optometrist or dentist. Often the amount you would be able to claim is based on a set procedure cost, not what the hospital or doctors actually charge you - which means that some procedures could leave you well covered (with money in the bank) whilst others could leave you heavily under-insured.

Other benefits include cover for funerals, accidental injuries and/or disability caused by an injury.

Pre-existing conditions may not be covered by your medical insurance. Just like your home insurance can only pay for damage that happens to your house after you’ve joined and not for damage that happens before that.

These are just a few differences - these products are highly complex so it’s always best to chat through your personal situation before making and decisions to shift or change products.

What about Gap Cover?

Gap cover is also an insurance product. It does not cover the full amount for hospital procedures as it works in conjunction with your medical aid - covering where your medical scheme falls short.

For instance, in cases where your chosen doctor charges more than your medical aid’s rate, the difference will be taken care of by Gap cover. It literally covers the gap. (this gap can be as much as 400%)

Depending on your medical aid options, Gap cover can be provided for:

• Oncology shortfalls
• Sub-limits
• Medical aid co-payments

These differences do not mean you should take up everything at once. Whilst GAP cover is generally considered a must-have, helping you choose medical aid or insurance options that are most suited to your lifestyle and your family setup is what we will do together in your financial planning sessions.

If you haven’t reviewed your medical cover, it’s best to do so towards the end of the year as most medical schemes don’t allow for changes or upgrades during the year.