Analysis of top 20 mega gap claims shows massive erosion of medical scheme benefits and huge cover shortfalls for members
An analysis of the top 20 gap claims (by Rand value) paid by Sirago Underwriting Managers during 2024 highlights an alarming reality for medical scheme members – the erosion of medical scheme benefits is resulting in members facing huge financial shortfalls for in-hospital treatment not covered by their medical scheme benefits.
Without gap cover in place, these 20 claims alone would see these medical scheme members having to collectively pay R3 million from their own pockets for in-hospital treatment. In many instances, the gap provider is paying more than the medical scheme – a complete misalignment if one considers the significant difference in premium/contribution between the two.
Gap cover is a supplementary insurance to a medical scheme benefit that covers the difference that arises from the rate that healthcare specialists charge for in-hospital procedures versus what a medical scheme pays.
A breakdown of Sirago’s 20 mega gap claims paid in 2024 follows:
| Condition | Age group | Gap paid | % paid by Gap | Medical scheme paid | % paid by medical scheme |
| Circulatory system | 50-65 years | R191 000 | 67% | R94 042 | 33% |
| Blood/Neoplasm | 50-65 years | R191 000 | 39% | R304 515 | 61% |
| Circulatory system | 66-75 years | R191 000 | 63% | R111 373 | 37% |
| Musculoskeletal | 50-65 years | R175 709 | 68% | R82 553 | 32% |
| Musculoskeletal | 66-75 years | R173 894 | 68% | R80 020 | 32% |
| Blood/Neoplasm | 50-65 years | R163 198 | 71% | R66 347 | 29% |
| Circulatory system | 66-75 years | R154 911 | 27% | R563 270 | 73% |
| Circulatory system | 30-49 years | R152 360 | 64% | R85 288 | 36% |
| Musculoskeletal | 50-65 years | R152 350 | 30% | R352 347 | 70% |
| Musculoskeletal | 10-29 years | R142 660 | 47% | R176 705 | 53% |
| Circulatory system | 66-75 years | R136 631 | 24% | R425 631 | 76% |
| Musculoskeletal | 50-65 years | R129 396 | 36% | R229 985 | 64% |
| Circulatory system | 66-75 years | R129 340 | 64% | R72 749 | 36% |
| Musculoskeletal | 30-49 years | R126 771 | 82% | R27 573 | 18% |
| Circulatory system | 30-49 years | R125 811 | 23% | R427 848 | 77% |
| Circulatory system | 66-75 years | R125 479 | 43% | R289 378 | 57% |
| Neoplasm | 66-75 years | R123 675 | 26% | R344 604 | 74% |
| Circulatory system | 30-49 years | R123 001 | 22% | R415 237 | 78% |
| Musculoskeletal | 76+ years | R121 276 | 51% | R120 230 | 49% |
| Musculoskeletal | 50-65 years | R119 685 | 44% | R151 361 | 56% |
| Total: | R2 948 383 | 40% | R4 421 056 | 60% |
- Of these 20 gap claims, all shortfalls were in excess of R100 000, while three reached the maximum overall annual limit of R191 000 that a gap policy may cover, per member.
- In almost half of the claims, gap cover paid more than the medical scheme paid. In one particular instance, gap cover paid R126 771 while the medical scheme paid just R27,573 – just 18% of the entire treatment bill was paid by the medical scheme.
- Of the total healthcare cost across all 20 claims, gap covered 40% of the total cost, while medical schemes covered only 60% of the total costs for in-hospital treatment.
“These are massively concerning statistics and demonstrate just how financially devastating the shortfalls are for in-hospital treatment that medical schemes are not paying for. It is indicative of how medical scheme benefits are being eroded as schemes try to limit premium increases – members are getting less cover and lower benefit limits, despite the premium increases in their medical scheme benefit every year. Secondly, specialist fees and healthcare cost inflation is out of control and certainly not aligned with what schemes or consumers can afford. In the absence of any price regulation, and the absence of any competition as medical specialists are in short supply, things can only get worse. Providers are free to charge any rate they wish, often many more times the rates that medical schemes reimburse at,” explains Martin Rimmer, CEO of Sirago Underwriting Managers.
This continued acceleration of mega claims is putting the premium under pressure which inevitably will result in high premium increases every year. Sirago points to its gap claims trends over the last four years, which clearly demonstrate that being on a medical scheme option – even a comprehensive one – is no guarantee that your bills for in-hospital treatment will be paid for in full by your medical scheme. And the shortfalls are growing rapidly in financial quantum.
“Of these 20 mega claims alone, the shortfall paid by gap cover was between R120 000 to R191 000. These are huge numbers that very few people can afford to fork out from their savings, or go into debt for – which they would have to do if they did not have gap insurance in place. Just consider the implications for a 30-year old with a growing family to support and serious financial constraints, or a 70-year old having to fund such a cost from their retirement savings,” adds Rimmer.
Healthcare financial planning is critical
Medical scheme members will have until the end of November to make any changes to their medical scheme options which will take effect from 1 January 2025. Given the affordability constraints, many are looking to cut back but still want access to private healthcare for any hospitalisation or serious health crisis they may face in future. Sirago advises that you work with your professional healthcare financial advisor to do the sums, take you through a comparison of the various benefit options and then devise the best plan to ensure that your healthcare needs and access to private healthcare are covered, as best possible.
“If you’re on a medical scheme benefit, then adding gap cover to your healthcare plan is a non-negotiable if you want to protect yourself from shortfalls on in-hospital treatment and specialist charges which can be anything from a few thousand Rand, to over R190 000. If you’re on a medical scheme option that covers 100% or 200% of tariff charged, you are going to face shortfalls when you consider that many specialists charge upwards of 500% of the medical scheme tariff. You will be liable to pay those shortfalls from your own pocket if you do not have gap cover. Make sure to discuss this with your healthcare advisor.
“Always engage the advice and services of an accredited, skilled, and experienced healthcare broker/ advisor who will help you make informed decisions when needed most, as well as support you through the administration processes with getting your cover in place,” concludes Rimmer.
