Gap cover in South Africa

What gap cover is in law

Insurers may sell some health products without being a medical scheme only if they fit the Demarcation Regulations — Part 7 of the regulations under the Short-term Insurance Act (and the matching part under the Long-term Insurance Act). Category 1 of the table in Regulation 7.2(1) is the medical expense shortfall contract: its purpose is "to cover the difference or a part of the difference between the total costs or expenses of a relevant health service and the amount a person's medical scheme paid towards such costs".

This is the product sold as gap cover. What a given policy pays (a multiple of the scheme rate, co-payments, cancer shortfalls…) is set in its own terms — read the policy schedule.

The annual limit for 2026

The original limit was R150,000 per insured person per year from 1 April 2017. Regulation 7.2(2) escalates it every year by CPI. On 1 September 2026 National Treasury published the 2026 amounts: the escalation uses the 2025 CPI of 3.2% (media statement).

Source: Treasury annexure for the Short-term Insurance Act. The limit is per insured person, not per policy, and applies from 1 April 2026 until the next escalation date (1 April 2027).

Rules that protect you

Regulation 7.3 of the Demarcation Regulations applies to gap cover:

• Group underwriting, no discrimination: no pricing or refusal on race, age, gender, state of health or similar grounds — but a higher premium may apply to everyone who joins a product line after a given age.
• The insurer may not refuse you unless you previously committed insurance fraud.
• Waiting periods: up to 3 months general and up to 12 months for a condition you were treated for in the 12 months before joining. No new condition-specific waiting period if you had a similar policy for at least 90 days and had already served it.
• Premium increases may follow the claims of the whole product line, not your own claims.
• Cancellation by the insurer only for non-payment, fraud, or closure of the product line with 90 days' notice.
• Commission caps: from 5% (premium above R1,200 a month) to 20% (below R300) — Regulation 5.3.

Is gap cover worth it? What the official figures show

Gap cover exists because schemes pay specialists and hospitals at their own rate, and the bill can be higher. The CMS measures what members pay themselves: out-of-pocket payments reached R46.3 billion in 2024; medicines were the largest part (35.09%) and payments to specialists rose from 27.59% to 28.47% of the total (CMS Annual Report 2025/26).

• More useful if your option pays specialists at 100% of the scheme rate, you expect a planned operation, a birth or cancer treatment, or your family's specialists charge above the scheme rate.
• Less useful if your scheme option already pays a higher multiple of its rate, or you use network specialists who agree to charge the scheme rate.
• Check the overlap: medicines were the largest out-of-pocket item in the CMS figures, so read the policy schedule to see whether out-of-hospital costs are covered at all.

Gap cover premiums are set per product line, and a higher premium may apply to everyone who joins after a set age (Regulation 7.3 of the Demarcation Regulations). Ask for the premium in writing and compare it with the shortfalls on your last year's accounts.

What gap cover cannot do

• It cannot replace a medical scheme. It pays only the gap after your scheme has paid, so without medical aid there is nothing to top up. Its marketing must carry the statement: "This is not a medical scheme and the cover is not the same as that of a medical scheme. This policy is not a substitute for medical scheme membership." (Regulation 7.5).
• It cannot pay more than the annual limit — R226,881.03 per insured person for the year from 1 April 2026.
• It does not change your scheme's obligations: Prescribed Minimum Benefits must still be paid in full by the scheme when you use its designated provider (see PMBs).

Complaints about a gap cover claim

Gap cover is insurance, not a medical scheme. A rejected gap cover claim goes first to the insurer, then to the ombud: for complaints against short- and long-term insurers the CMS points to nfosa.co.za (CMS). See complaints.

Sources

1. National Treasury — Short-term Insurance Act regulations, Part 7 (Demarcation Regulations, GN 1582 of 23 December 2016)
2. National Treasury — Media statement: Demarcation Regulations, 2026 escalation of policy benefits (1 September 2026)
3. National Treasury — Short-term Insurance Act, Regulation 7.2(2): policy benefits escalation table (2026)
4. Council for Medical Schemes — Annual Report 2025/26 (copy tabled in Parliament, hosted by PMG)
5. Council for Medical Schemes — The Complaints Procedure (Web Archive)