The Ombudsman for short-term insurance (OSTI) has warned customers of medical insurance to pay very careful attention when selecting medical care products – as the devil is the detail when it comes to accepting or rejecting claims.

In the OTSI’s annual report for 2022, Junior Assistant Ombudsman Eunine Dlamini looked at a dispute regarding gap medical care.

In the dispute, MR D registered a claim with his insurer for his wife’s hospital admission, where various medical treatments were performed on her.

However, one medical procedure was rejected by the insurer as it was not covered by the medical aid scheme.

Mr D said that he was entitled to the policy benefit as he was not made aware of the exclusions.

The insurer said gap cover assists with “shortfalls on authorised in-hospital procedures and a list of outpatient procedures where the providers charge over the medical aid scheme/tariff rate”.

The medical scheme thus has to first pay a portion of each procedure code, with each amount charged according to the agreed scheme or tariff rate for the gap cover to start.

The medical scheme did not make any contribution to the R8,750.68 charge as the scheme did not cover the benefit.

The insurer rejected the claim based on the medical scheme’s policy exclusion.

“The Insurer shall not be liable for any cost related to or in consequence of hospitalisation, bodily injury, sickness or disease directly or indirectly caused by: Any procedure or code not covered or declined or paid as an exception by the Medical Scheme unless specific cover has been provided in the Policy.”

The insurer said that Mr D was aware of the policy terms and conditions and was provided with a copy of the policy documents. It also provided proof of communication.

The OSTI upheld the insurer’s rejection of the claims, as the benefit was not part of the scheme.

It said that Mr D had the documents and was made aware of the policy terms and conditions.

Dlamini said that policyholders should know that gap medical cover is a short-term/non-life insurance product; it is not a medical scheme.

Gap medical insurance covers the difference between medical aid scheme rates or tariff rates and the rates charged by healthcare partitioners.

Like all other insurance products, it is subject to certain exclusions, exceptions, and conditions.

Dlamini said that policyholders must acquaint themselves with their policy’s terms and conditions.


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