For many South Africans, a trip to the hospital results in more than just a health scare – it can also deliver a serious financial blow. Medical aids increasingly only cover a portion of in-hospital costs and specialist treatments. Patients are then liable for any co-payments, as well as shortfalls that occur when providers charge more than medical aid rates. Financial advisors guide clients through the decision-making process, ensuring that cover suits both individual healthcare needs and financial circumstances.
A rising tide of claims
As medical aid schemes shift additional costs onto members, medical expense shortfalls are becoming increasingly common. Despite this, there remains a common misconception that if you have medical aid, you don’t need gap cover. However, in recent years we have seen a significant increase in co-payments experienced by members across all tiers of medical aid schemes. A co-payment is something a medical aid will not cover, no matter what – sort of like an excess on car insurance – which means that, unless your client has gap cover, they will need to fund this out of pocket.
…in recent years we have seen a significant increase in co-payments experienced by members across all tiers of medical aid schemes.
Gap cover claims have grown in proportion with the decrease in what medical schemes cover and the rise in co-payments. In particular, musculoskeletal issues, maternity and gastrointestinal conditions are becoming increasingly prevalent. Alarmingly, cancer-related gap cover claims have also grown significantly. Five years ago, they made up 8% of Turnberry’s total claims but now account for 12%.
Stress, modern diets and inflammation are frequently linked to a general rise in health problems across all age groups, and many of these conditions are linked to lifestyle. This means that we can expect to see even more claims in the future, with higher costs and increased shortfalls as medical inflation continues to grow at a higher level than medical aid schemes can increase their premiums.
Working with your financial advisor is advisable
Finding the right gap cover isn’t just about choosing the most expensive option. It requires a full financial assessment, including income, dependants, existing medical aid plans and future health risks. Advisors can play a key role in helping clients to get the balance of cover right. There is no one-size-fits-all solution, and a good advisor will consider a client’s full financial and family situation to help balance affordability with optimal protection.
In many cases, advisors help clients avoid crippling financial losses by advocating for gap cover. Turnberry’s top five lifetime claims reveal just how expensive serious health issues can be and how no age group is immune. The highest claim, exceeding R678 000, was paid out for a 44-year-old client diagnosed with cancer of the ureter. A 27-year-old client has claimed close to R478 000 for a complex combination of conditions including systemic lupus, spinal complications, nerve pain and digestive disorders, highlighting how chronic illnesses often lead to a long and costly treatment journey.
Another client, aged 54, faced medical expenses of R450 000 due to lung cancer, spinal stenosis and chronic obstructive pulmonary disease. In another case, a 36-year-old claimed R448 000 for benign tumours in the nasopharynx and pharynx, persistent sinus issues, epilepsy and spinal problems. Even a 22-year-old incurred over R414 000 in costs for spinal issues, skin cancer and atrial fibrillation. Without gap cover, these bills would have had a lifelong impact on each of these clients and their families.
Gap cover
Gap cover is no longer a nice-to-have; it is a vital safety net.
The best time to take out gap cover was a year ago. The second-best time is now. Gap cover is no longer a nice-to-have; it is a vital safety net. In today’s healthcare landscape, gap cover is not merely an optional supplement but rather a fundamental component of financial security in the face of unexpected medical expenses. Ultimately, embracing gap cover equips individuals with the peace of mind necessary to navigate their health journeys without the looming burden of exorbitant costs.
Financial advisors have a key role to ensure that clients have the best medical aid plan for their needs and budget, and that they have a gap cover product in place to minimise any potential medical expense shortfalls. Gap cover is an investment in your client’s health and long-term financial wellbeing.
