SA's No 1 Insurance Blog

When it comes to insurance, what would you rate as your top priorities?

This is how I arrived at my essential list:

  • Driving a financed vehicle? Man, I wouldn’t risk driving on our roads without insurance; I don’t know about you. Paying off two car loans, wow!
  • Life insurance? Important, but not as important as car insurance.
  • Medical aid? Very important, especially if I can afford it. The day-to-day stuff like seeing doctors and dentists isn’t as important as being covered for a major operation.

In my situation it’s definitely car insurance and medical aid – which is why I have both.

But there is a bit of bad news when it comes to medical aid.
You see, if I’m in a car crash, my car insurance will pay for my vehicle repairs if I have a valid claim.  If I ever need an op, it’s possible my medical aid won’t pay all of the cost of my repairs even if I have a valid claim.

That’s why I’ve added medical gap cover – you might know it as medical top up cover – to that list.

So what then is gap cover?

Gap cover is to medical aid what a scratch and dent policy is to your car insurance – what an emergency parachute is to your main chute – what air is to your body.

In an ideal world:
The money you spend on medical aid will pay for all your medical costs.

In the real world:
You discover that the really annoying stuff, like dentists and spectacles, is all paid from a savings account. Once this account was empty, you now pay the rest of your bills from your own pocket.
If you belong to a traditional medical aid without the savings account, you’re then limited to the number of times you can use these benefits.

Now if you’re spending R5, 000 a month on medical aid, then this becomes upsetting to say the least.
So the healthy amongst us decide to end the whole savings thing, and self-finance the visits to the doctor and dentist.

Wouldn’t you prefer paying R3, 000 a month and knowing that if you ever need a hospital, it’s fully taken care of?
Turns out we’re wrong again…Your medical aid isn’t going to pay everything!

Nowadays you need medical gap cover, and if you think I’m talking nonsense, then why is your medical aid trying to sell you gap cover?

Gap cover pays the difference between what your medical aid is willing to pay, and what the specialist/s performing your operation are charging. And the difference between these two can be R500 or as much as R100, 000 (Actually even more that this, but I don’t want to scare you).

Here’s an example:
Zestlife, the company we’re discussing today, paid out a R19, 256 claim in 2016 for natural child birth. For crying out aloud, it’s natural child birth. What did women do in the old days? Or how about having to pay in R25, 406 for a caesarean section? Makes you wonder about two things:

  • your gynaecologist’s motives for recommending the C-section, or
  • Whether your medical plan is worth the money you’re spending on it

There are a ton of gap cover companies out there, but today I want to give Zestlife an opportunity to tell us what makes them different.

What are the risks you face while in hospital?

Our biggest concern is whether our medical aid is going to cover the cost.

Of course, dying is the other major concern, but I think they’re a close tie. One claim paid by Zestlife in 2016 was for an amount of R109, 224 relating to cardiac bypass surgery.
Two things come to mind:

  • Opting for a bottom of the range medical aid could cost you bigtime when you actually use it, and
  • There’s not much assurance that your expensive medical aid will pay everything either

The problem comes in between what your medical aid is prepared to pay for a procedure, and what the medical specialists actually charge.
The difference between the two is known as the gap, and that’s why you need gap insurance.

Zestlife say that on average, medical schemes will pay less than half of the total fees charged.

The second problem is co-payments.

Many schemes have a co-payment involved when it comes to having certain procedures done. Having to find R10, 000 in order to proceed can be crippling especially in light of the fact that you will still have to pay your monthly medical aid contributions after the procedure.

I mean, think about it, you’re spending R5, 000 a month on medical aid already. Then you have an operation which comes with a R15, 000 co-payment. You take out a loan for the R15, 000 payable over 12 months, and now get to add close to R2, 000 a month to your medical aid cost.

The third problem is sub limits for internal prosthesis and artificial joints.

I don’t know about you, but every second person I meet seems to be having a hip or knee or shoulder replacement? Evidently we’re all at risk of this at some point, so it makes sense to check whether your medical aid has limits on this.

You go in for a hip replacement only to find out that your benefit is capped at R20, 000 per person.
The specialist quotes you at R50, 000. What now?

You need to have some sort of benefit which increases that medical aid sub limit from R20, 000 to R50, 000.

The fourth problem is co-payments for using a non-network hospital.

So here’s my personal example.

I’m on a medical plan where I get a discount by agreeing to use a networked hospital option. If I ever need to book into hospital, then I must use one of the hospitals in the network.
Should I not do so, then I need to make an upfront payment of R8, 100 to the hospital of my choice.
Now I’m willing to take the chance because it so happens that I live close to one of these networked hospitals.

But what if the specialist I’m referred to doesn’t operate out of this hospital? My options then become:

  • Find another specialist, or
  • Pay the R8, 100

Wouldn’t it be nice to have a gap cover product which will take care of that?

The fifth problem is co-payments for cancer treatment

Here’s how oncology benefits work at my medical aid scheme:
I get R200, 000 per year for oncology treatment.  Once I’ve run through the R200, 000 I need to make a co-payment. In my case I think it’s 20% for any additional treatments.

So let’s assume each treatment costs R20, 000 (Am I being ridiculous here?). That’s R4, 000 out of my pocket for each treatment.

So which of these problems does Zestlife address?

Zestlife offers two products:

  • Universal Medical Gap Cover, and
  • Medical match cover

Let’s look at how their Universal Medical Gap Cover product addresses each of these problems…

Problem one -The cost of specialists while in hospital

Zestlife will pay up to 5 times your medical aid tariff rate for in hospital expenses generated by doctors and specialists.
So if your medical aid is prepared to pay R1, 000 for a procedure, then  Zestlife is prepared to pay the difference between this and what the specialist charges, by up to R5, 000.

On top of this, Zestlife will pay up to 5 times the medical tariff rate for outpatient treatment for around 50 procedures. This includes the cost of MRI, CT, and PET scans.

Problem two – Co-payments

Full cover for co-payments
The gap cover product I’m most familiar with, pays a maximum of R20, 000 per admission. Nuff said!

Problem three – Sub limits for internal prosthesis and artificial joints

R30, 000 per year per policy
Once again, this is a healthy amount. The plan I’m currently on only pays R10, 000 per year.

Problem four – Co-payments for non-networked hospitals

Zestlife will pay R8, 000 per year as a once off amount. Not quite the R8, 100 I need, but close enough.

Problem five – Co-payments for cancer treatments

Zestlife will pay up to 20% of the treatment co-payment once you’ve run through your annual oncology benefit at your medical aid. The 20% co-payment is limited to R250, 000 per year per person on your plan.

So what happens if you were diagnosed with cancer prior to joining Zestlife?
Provided it was in remission when you took out your Zestlife policy – and it remains in remission for at least 5 years before the subsequent diagnosis – it will be covered.

Believe me, this is a biggie!

And then there are the benefits I haven’t mentioned

Things like:

  • Enhanced cancer cover which pays R25, 000 as a lumpsum in the event of first time diagnosis of cancer
  • Breast reconstruction surgery which pays up to R20, 000 towards the costs of the reconstruction of the non-affected breast when a single mastectomy occurs. I never thought of this before. It’s quite possible that your medical aid will consider this to be cosmetic surgery, in which case they won’t pay.
  • Emergency room cover pays up to R5, 000 for casualty visits caused by accidents. Remember that casualty visits aren’t paid from your hospital benefit. Usually they get paid from your savings account – or from your pocket.
  • Accidental dentistry cover of up to R14, 000 paid per person if a tooth is fractured because of a blow to the head (Boxers take note!). Basically you’re covered for R2, 000 per tooth. I haven’t seen this one before.
  • Accidental death and permanent disability cover pays R25, 000 as a lumpsum.
  • Emergency transportation and search and rescue cover paid up to R25, 000 per claim. Mountain climbers take note!
  • Life support machinery and equipment cover paid at R25, 000 per claim. This pays for the rental of any life support equipment which might be needed.
  • Trauma counselling covered at R750 per session with an annual limit of R25, 000.
  • Medical aid and medical gap cover costs paid at up to R6, 000 a month for 3 months in the event of death or permanent disability of the policyholder.

So how much does it cost in 2017?

The good news is that Zestlife treats everyone differently.

“Why?” you may ask. Well why should a single young person pay the same as someone who is older or who has a family?

  • A single person – younger than 55 – pays R295 a month
  • A single person – older than 55 – pays R369 a month
  • A family pays R369 a month

So here’s an example:

The hospital plan I’m on costs R1, 317 a month in 2017 for a single person. That’s for a plan where I must use a networked hospital option. The next step up costs R1, 648 a month – that’s a R331 difference every month, and now I get 500% cover versus 100%.

Next time out I’ll write about the Zestlife Medical Match Cover product. All in all, the Zestlife Universal Medical Gap Cover product is value for money and offers benefits which I’ve never thought of before.

If you’re interested in the product, why not leave your details below?


Kind Regards,

The InsuranceFundi Team

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