Are the powers that be trying to shut down the health and accident policy space? Seems like it. Will they succeed? I can’t see it happening! So what is the issue here? The argument is that medical gap cover products are encouraging downgrading of medical aid cover (which in turn reduces the risk pool of the medical schemes). The real issue is that people are downgrading their medical aid cover because of cost. It’s an affordability issue! Medical Aid contributions have far out stripped inflation for years and people simply can’t keep up anymore. Plus, if your medical scheme isn’t paying out at specialist rates what else are you supposed to do but cover the gap? Failing to do that will mean carrying the cost yourself at claim stage.
The recent Supreme Court ruling in the matter between Guardrisk Insurance Company Limited and the Registrar of Medical Schemes, the court included in its judgment the following statement “Practically reality has shown that there exists a need for this type of insurance and there seems to be no reason why it should not be permitted.”
There are a few proposals on other types of insurance product offerings that might be better than the status quo, but in my mind the foundation for medical gap cover has already been laid. Specialists in this country are charging what they like, medical schemes aren’t prepared to fit the entire bill, a gap now exists between what your specialist is charging and what your medical scheme is prepared to pay and a couple of innovative underwriters have designed a great new product at really great rates to cover the gap. I SEE NO PROBLEM WITH THIS. And yes I own a medical gap cover policy and so do several hundred clients of mine. Perhaps the powers that be should chat to a few of them who have already had claims returned unpaid by medical schemes and have successfully been able to claim back from their new gap cover policies.
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Until next time.
The InsuranceFundi Team