By James White, Director of Sales and Marketing at Turnberry Management Risk Solutions
As South Africans prepare to review their medical aid plans ahead of the window for change leading up to December, many are grappling with the difficult decision of whether to downgrade their cover. Rising costs and ongoing economic pressures have led an increasing number of individuals and families to seek more affordable medical aid options. However, while downgrading may be an immediate cost-saving measure, it is crucial to understand how this decision impacts overall coverage and why adding gap cover should be a vital part of your strategy.
The consequences of downgrading medical aid plans
In 2025, medical aid contributions are expected to rise significantly, with many schemes projecting increases in the 10-15% range, far outstripping the Consumer Price Index (CPI) and most people’s salary increases. These hikes pose a major financial challenge, especially for the average family whose income growth may not keep pace with the rising costs of healthcare. As a result, many are choosing to downgrade from comprehensive plans to more affordable options, often focusing on hospital cover while choosing to manage day-to-day medical expenses out-of-pocket.
However, downgrading often comes with hidden costs. Lower-tier medical aid plans may only cover 100-200% of the scheme rate, while medical specialists and healthcare providers frequently charge significantly more than this. This leaves you vulnerable to substantial out-of-pocket expenses, particularly for specialist care or hospital procedures. As a result, gap cover, which is designed to cover the shortfall between what medical schemes pay and what healthcare providers charge, becomes increasingly essential when downgrading your medical aid.
The vital role of gap cover
When you downgrade your medical aid plan, you may face more co-payments, reduced benefits, and sub-limits on procedures that previously had unlimited coverage. Gap cover serves as a critical financial buffer, protecting you from these unexpected medical expense shortfalls. However, it is important to note that many medical aids are making changes to existing plans for 2025, with increased co-payments and reduced benefits, and potential sub-limits on procedures that previously had full coverage. This means you need to be more informed than ever, not only if you are thinking of downgrading, because changes may affect your existing plan as well.
By incorporating gap cover, you can safeguard against these potential shortfalls and ensure that you are not caught off-guard by additional expenses. This safety net can help you navigate the complex and evolving healthcare landscape in South Africa, ensuring that you remain adequately covered, even in challenging economic times, particularly as medical schemes change the way their cover operates.
Evaluating your medical aid and gap cover options
When reviewing your medical aid policy, it is essential to assess how well it meets your current and future needs, including factors such as affordability and coverage limits. Navigating the complexity of this often requires expert advice, which is why your broker is an invaluable resource. Brokers have an in-depth understanding of the medical aid landscape and can guide you in making the most informed decision for your unique needs, whether you are downgrading your plan or considering other options.
Your broker can help you understand the potential shortfalls that come with a downgrade and ensure you have the right gap cover to supplement your plan. They will also assist you in reviewing your policy schedule, interpreting medical aid terminology, and comparing plans to ensure that you are fully aware of the benefits and changes heading into 2025. The right broker will work with you to find a medical aid plan and gap cover that align with your life stage, financial situation, and healthcare needs.
Ultimately, working with your broker to ensure you have the right medical aid plan and gap cover will provide peace of mind and protect your financial wellbeing in an ever-changing healthcare environment. With the right guidance from a knowledgeable broker, you can make informed decisions that safeguard both your healthcare and your financial future.
About Turnberry Management Risk Solutions
Founded in 2001, Turnberry is a registered financial services provider (FSP no. 36571) that specialises in Accident and Health Insurance, Travel Insurance, and Funeral Cover.
With extensive experience across healthcare and insurance industries in South Africa, Turnberry offers unsurpassed service to Brokers and clients. Turnberry’s gap cover products are available to clients on all medical aid schemes, as they are independently provided and are therefore transferable in the event of a change in the client’s medical aid scheme.
Turnberry is well represented nationally, with its Head Office based in Bedfordview, Johannesburg with Business Development Managers in Cape Town and Durban. The Turnberry Team’s focus on outstanding client service comes from having extensive knowledge and experience in the financial services sector and is underwritten by Lombard Insurance Company Limited. Lombard Insurance Company Limited is an Authorised Financial Services Provider (FSP 1596) and Insurer conducting non-life insurance business.
