Getting to the bottom of gap cover and the new laws

Health writer Susan Erasmus helps listeners understand the murky waters around medical gap cover.

She explains that after four years of consultation, the government has finally decided the following.

Yes to limited gap cover, yes to hospital cash plans and no to primary health care policies.

Susan Erasmus, health writer

They were thinking of outlawing gap cover in its entirety at one point but now they have said it can carry on but that new policies will be subject to certain regulations and certain maximum payouts.

Susan Erasmus, health writer

Existing gap cover policies will have to comply with the new regulations by January 2018.

The biggest change is that gap cover policies are now limited to a payout of R150 000 per year per client. Whereas before it was unlimited.

Susan Erasmus, health writer

She says they have drawn a clear line between insurance and medical schemes and that is what the new legislation is all about.

They kept saying what is governed by the Medical Schemes Act and what is governed by the Insurance Act?

Susan Erasmus, health writer

Now the gap cover policies and the hospital cash plan are now securely under the long-term and short-term Insurance Act.

The primary health care policies have been scrapped, or have fall under the regulations of the Medical Schemes Act, she says.

Gap cover only covers in hospital visit costs.

What's the difference between hospital cash plans and gap cover?

The hospital cash plan does not pay your medical bills. It is an insurance plan that pays you per day that you are in the hospital. People make the mistake of thinking it will cover medical bills but this is not the case.

These hospital cash plans have now been limited to a maximum of R3000 per day or a total lump sum of R20 000 a year, which is clipping their wings fairly finally I should imagine.

Susan Erasmus, health writer

Erasmus says the new laws are a reasonable compromise.

In the past, she says the health minister has criticised gap cover policies because he says their existence gives private doctors a blank check because their clients will be covered no matter what they charge.

Take a listen to this health expert explaining the complex subject of gap cover:

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