Understanding the limitations of medical aid in South Africa

For many South African families, medical aid is seen as the cornerstone of healthcare security. It promises access to private hospitals, specialists, and advanced treatment. For this reason, people often assume it provides complete financial protection.

However, the reality is more complicated.

Tony Singleton, CEO at Turnberry Management Risk Solutions, says that as healthcare costs rise and specialist tariffs increasingly exceed scheme rates, households are discovering that medical aid does not always shield them from financial shocks. During stressful medical events, whether an unexpected surgery, an oncology diagnosis, or an emergency admission, families are often confronted with shortfalls, co-payments, and out-of-pocket expenses they did not anticipate.

One of the most common misconceptions, Singleton explains, is that “100% of scheme rate” means full cover. In practice, medical schemes reimburse according to their own tariff structures, while specialists in fields such as oncology, orthopaedics, and neurosurgery often charge significantly more. The difference between what is charged and what medical aid pays becomes the responsibility of the patient.

Co-payments and sub-limits have also become more common as schemes attempt to balance medical inflation with regulatory limits on premium increases. Co-payments of more than R40,000 are no longer unusual and may be required upfront before treatment can proceed. Even members on higher-tier options are not immune to these gaps in cover.

“This is where expectation collides with reality. Families believe that medical aid will cover everything, but scheme rates and specialist charges are often worlds apart. The shortfall becomes the patient’s responsibility, and without gap cover, those costs can be devastating," Singleton says.

According to Singleton, these shortfalls seldom arrive as a single, dramatic bill. More often, they accumulate gradually: a co-payment for a procedure, a tariff shortfall for a surgeon, additional scans, follow-up consultations, and further admissions.

“Over time, these costs can add up to significant sums. Recent claims data show lifetime shortfalls ranging between R441,000 and R678,000. One client undergoing treatment for a malignant ureter tumour required more than R678,000 in gap benefits across 44 claims. Another, managing autoimmune, gastrointestinal, and spinal conditions, claimed R478,000 over 27 incidents. A third experienced shortfalls exceeding R450,000 related to lung disease and spinal complications.

“These are not isolated cases. They reflect the reality of medical journeys that many South Africans face. Medical inflation continues to outpace salary growth, and households are being forced to dip into savings, reduce investments, or take on debt to manage expenses not fully covered by their medical schemes,” he says.

While medical aid remains essential, Singleton says it is no longer sufficient on its own to guarantee financial certainty. Gap cover was designed to bridge the difference between scheme tariffs and provider charges, covering in-hospital shortfalls, co-payments, and certain sub-limits.

“Gap cover is not a luxury; it is a necessary complement to medical aid. Without it, families risk financial strain at the very moment they are most vulnerable,” he says.

While gap cover can help address medical shortfalls, broader financial resilience requires additional planning.

Gavyn Letley, product head at DirectAxis, says planning for healthcare is not only about ensuring access to treatment, but also about protecting savings, retirement plans, and overall family stability.

The first step, he says, is to consider what you can realistically insure against, particularly events that would be difficult or impossible to recover from financially without insurance or an emergency fund. These may include a house fire, a car being stolen or written off, or a prolonged hospital stay due to illness or an accident.

Letley adds that while many South Africans insure their homes, cars, and health, few have sufficient savings to deal with everyday emergencies such as a broken appliance, a burst pipe, or a car breakdown.

“Having money set aside in an emergency fund makes it easier and less stressful to deal with problems,” he says.

He recommends saving at least three months’ worth of living expenses, keeping the funds in a separate account, and replenishing them if used.

Research by DirectAxis shows that dealing with emergencies is the leading reason South Africans apply for personal loans, with 28% citing emergency expenses as their primary motivation. While loans can provide short-term relief, Letley says maintaining a good credit record and building an emergency fund remain the most sustainable long-term strategies.

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