The Future of Gap Cover under National Health Insurance

20 August 2019

Recently there has been much debate around the effects of a National Health Insurance for South Africans. Zestlife’s Sebastian Zoutendyk (Director) shares some thoughts around this issue.

Gap Cover pays for medical treatment cost shortfalls that medical schemes do not pay in full. The future of Gap Cover is therefore paired to the role of medical schemes if and when the NHI is implemented. Zestlife will continue to monitor the implementation of the NHI and respond with policy enhancements that best serve to protect our policyholders from any medical expense shortfalls.

Zestlife fully supports the goal of the NHI to provide all South African’s with universal health care. This should be affordable, accessible and of an acceptable quality, irrespective of the ability to pay. With South African taxpayers likely to carry the burden of universal healthcare, we simultaneously support the right that all South Africans should be free to choose a public or private healthcare treatment. NHI should not be at the exclusion of the right to utilise a medical scheme or private health insurance.

Parliament discussed the National Health Insurance Bill on the 8th August 2019.The targeted date for the implementation is 2026. The rollout of the NHI should take place over an extended period. However, some policy analysts suggest that there will be restrictions due to constraints on public finances.

The capacity of the public service to run the NHI has also been the subject of sceptism. William Gumede, Associate Professor at Wits University School of Governance says, “Policymaking is frequently to ideologically rigid, idealistic and pie-in-the-sky without taking consideration of cold realities”. Poor planning and court challenges have scrapped many policies. In his view the same could happen to NHI.

The Bill is currently uncosted but Professor Gumede believes it will cost in excess of R250bn a year. The NHI Bill envisages that a combination of increased taxes and abolishing medical scheme tax credits would be the source of funding.

In the period prior to the NHI targeted implementation in 2026, the way medical schemes operate should be remain unchanged. The role of medical schemes after NHI comes into effect still requires much further clarity. The Bill in its current form states: where patients choose not to follow the referral pathways, the NHI will not reimburse their care, and that they can then claim from private health insurance.

It appears likely that medical schemes will continue to offer alternative and complimentary cover for its members. We think the NHI will create additional opportunities for medical schemes and health insurance providers like Zestlife to service a need for private health care funding.

We will continue to offer the most comprehensive Gap Cover for medical treatment cost shortfalls.  If NHI leads to a change in the needs of policyholders, we’ll adapt our policy benefits to enable our clients continued funding. They will have access the health care providers of their choice.

Click here to find out more about Zestlife Gap Cover and all its benefits.

The information contained in this communication, including attachments, is not to be construed as advice in terms of the Financial Advisory and Intermediary Services Act of 2002 (“FAIS”) as the writer is neither an appointed representative of Zestlife, nor a licensed financial services provider as contemplated in FAIS. Please consult your Financial Adviser or Zestlife should you require advice of a financial nature and/or intermediary services.