Planning a pregnancy? Ease the pressure on your family’s finances

As with many aspects of parenthood, the healthcare costs associated with pregnancy and childbirth can come as an unexpected shock for first-time parents.

A case study of a family with two young children demonstrates the financial considerations families face when accessing private maternity care.

First baby – with medical scheme membership

“With the birth of our first child, we didn’t have gap cover and I didn’t think we needed it because we were on a medical scheme,” mother of two Sally Watkins* recalls.

As we soon discovered, the gynaecologist obstetrician we chose to deliver our baby was not contracted to our medical scheme’s network. I understood there may be some out-of-pocket payment required, but when it comes to childbirth, you want to be with the gynaecologist you trust most. Ultimately, this meant we had to pay in almost R20 000 for the specialist fees alone.”

Bianca Viljoen, product development director: Agility Gap & CoPay, explained that gap cover is short-term insurance that pays out when a person is confronted with medical expenses exceeding the amount covered by their medical scheme for healthcare services.

“Even the more comprehensive medical scheme benefit options may not provide sufficient cover for highly specialised medical services. Gap cover products are designed to reduce the need for out-of-pocket payments by covering shortfalls between medical scheme rates and rates charged by private medical professionals,” she said.

“All medical scheme options have a standard scheme rate at which healthcare expenses are paid, and standard options may provide cover at a rate of 100%, while more comprehensive options cover up to 300%,” Viljoen explained.

Medical professionals’ rates are not regulated, although these may be negotiated with providers, and medical schemes refund claims in accordance with rates set by the Board of Healthcare Funders. It is therefore at a specialist’s discretion how much they charge for their services. While some may charge only 100% of scheme rates, others may bill their patients significantly more.

As with the Watkins’ experience in the case study, even the more comprehensive medical scheme benefit options may not provide complete cover for specialised medical services,” she said.

“When a medical scheme member is admitted to hospital and the services rendered by medical professionals are charged at rates exceeding medical scheme rates, gap cover can help to soften the financial impact on the family budget for costs that would otherwise need to be paid out of the member’s pocket,” she advised.

“Expectant parents who are not prepared with gap and co-pay cover should also brace themselves for the likelihood of co-payments and shortfalls for in-hospital costs not provided for in their medical scheme benefits.

Second baby – with medical scheme membership and gap cover

Mrs Watkins explained that after the financial shock of the co-payments for their first pregnancy, the family immediately invested in a gap and co-pay policy.

“When I fell pregnant with my second child, we had prepared for the upfront payments and knew what to expect with specialists’ fees and other aspects that fell outside our medical scheme benefits. This time, the gynaecologist obstetrician fees were in the region of R22 000, of which the medical scheme paid R4 000 and the rest was settled with gap cover,” Mrs Watkins said.

“Considering that the monthly fee for gap cover is a fraction of our medical scheme contribution, it saved us having to come up with R18 000 out of our budget at a time when we had other expenses to think about for our growing family.

“When choosing a gap cover package, there are certain aspects that should be borne in mind. If you have no previous cover, check with your prospective provider whether a waiting period will be imposed, as there may be a three-month general waiting period, during which no claims can be processed, as well as up to 12 months’ condition-specific waiting periods for defined pre-existing conditions,” Viljoen advised.

When you’re expecting a baby, the last thing you need is the additional stress of worrying about medical bills. For this reason, gap products offer a maternity lump sum after the first trimester of pregnancy, which is not dependent on the cover provided under medical scheme membership and is accessible even if your benefit limits have been exceeded.

“Weigh up the options available,” Viljoen explained.

“If your baby is delivered prematurely, this can also lead to unforeseen expenses and more specialised neonatal intensive care requirements.”