So you are a member of a medical scheme.  This scheme makes provision for covering your day-to-day medical needs by way of a medical savings account.  But, what happens when you run out of medical savings?

An additional benefit is available, if you are prepared to pay just a little more.

This is commonly known as the above-threshold benefit.  Your medical scheme can inform you regarding how this benefit is applied … but there is a caution, and that is the self-payment gap.

Since calculations that determine the self-payment gap amount and how this amount can change has caused much misunderstanding for as long as this innovation has existed.

What you need to know

Self-payment gaps are tools that medical schemes use to try control members from accessing the risk portion of their benefits, as this benefit is funded by the medical scheme and not member’s savings.  The risk portion of the scheme’s benefits is the main part of your contribution and acts in the same way that short term insurance does. You pay this premium in the event that you need to access the funds from your medical scheme to pay for treatment in hospital.

Here are a few key factors I believe are useful for you as a member to understand in order for you to manage your self-payment gap – your aim is to keep the self-payment amount as low as possible. Unfortunately, medical schemes make it quite difficult for members to minimise this amount.

Factors to take into account are:

• Understand what your annual threshold and annual medical savings are. The difference between your annual threshold and annual savings give you your initial self-payment.
• Be aware that you can increase your self-payment gap
• It is essential to understand that self-payment gaps only get reduced by claims you pay for at medical aid rates. Let’s take the following scenario to demonstrate the point. You are in your self-payment gap and it is R1 000. You visit a GP who charges you R500; you pay the GP R500 and submit that claim to the medical scheme to reduce your self-payment gap. The medical aid rate for a GP consultation is R320, so even though you have paid R500, your self-payment gap will only reduce by R320.

Perhaps the most important point to note about self-payment gaps is to make sure you really do need a plan that employs an above-threshold benefit. If you have been on a plan for two years or more, and you have never closed your self-payment gap (that is, you have paid the amount determined by the medical scheme from your own pocket and submitted those claims to the medical scheme; the scheme then started paying for your day-to-day claims from the above-threshold benefit), you are in all likelihood a little over insured.

It is always helpful to consult your financial advisor – he or she can assess your needs and place you on the appropriate plan.