Personal Finance Financial Planning

Understanding the limitations of traditional gap cover in South Africa

Aleesha Reddy|Published

Explore how the rising costs of healthcare in South Africa are impacting families and discover how innovative gap cover products can provide essential outpatient support.

Image: AI Lab

As we reach the year’s halfway point, many South Africans are beginning to feel the financial pinch, not just from rising living costs, but also from depleted Medical Savings Accounts (MSAs). It’s in these moments that the limitations of traditional gap cover become painfully clear. While most gap cover products are designed to bridge shortfalls during hospital admissions, they rarely support outpatient and day-to-day medical costs.

The growing cost of outpatient care

According to the Council for Medical Schemes 2022/2023 Annual Report, South Africans paid close to R40 billion out-of-pocket for healthcare, with nearly half of that going toward outpatient services, not hospital stays. These costs include essential visits to specialists, radiologists, and dentists, which are often not fully covered once MSAs are exhausted.

Rethinking the role of Gap Cover

Recognising this shortfall, some newer-generation gap cover products have introduced day-to-day benefits designed to step in once MSA or scheme sub-limits are depleted.

The cover offers members an extra R20,000 each year for outpatient cover, for:

  • Specialist consultations referred by a GP
  • Basic and specialised dentistry (fillings, root canals, trauma-related dental reconstruction)
  • Specialised radiology and pathology tests prescribed for diagnosis or treatment

These benefits are only activated once a member’s MSA has been used up, helping extend access to care during the months when medical finances are typically under pressure.

A practical boost to your day-to-day cover

To put this into perspective: if your medical scheme allocates R7,500 in MSA funds annually, the GapCare benefit could effectively take that pool to R27,500, adding a significant buffer, especially for families juggling multiple healthcare needs.

This additional layer of outpatient support helps avoid delayed treatment, financial stress, or out-of-pocket borrowing which are all common outcomes when MSAs deplete mid-year.

Not just for emergencies

The reality is that most families use healthcare regularly, not just during emergencies. Gap cover that mirrors this usage pattern, with meaningful outpatient benefits, is fast becoming a necessity, not just a nice-to-have.

* Reddy is the general manager of product and pricing at NetcarePlus.

 

PERSONAL FINANCE