The growing healthcare gap employers can’t afford to ignore

For many South African employees, having medical aid provides a sense of security. However, an increasing number are discovering that medical aid alone may not be enough to shield them from significant healthcare costs.

According to Gloria Madonsela, Healthcare Consultant at BDO Wealth, rising specialist fees are creating a widening gap between what medical schemes pay and what healthcare providers charge. This leaves employees vulnerable to unexpected and often substantial out-of-pocket expenses.

“The challenge is that many specialists are no longer contracted to medical schemes,” explains Madonsela. “As a result, they can charge significantly more than medical scheme rates, while schemes typically limit the amount they are prepared to reimburse.”

Even employees with comprehensive medical aid may find themselves responsible for large portions of medical bills. In some cases, specialists charge 200%, 300%, or even 400% above medical scheme rates, creating significant shortfalls that employees must fund themselves.

The hidden cost of a medical emergency

Many employees assume that gap cover is only relevant for older individuals or those with pre-existing health concerns. In reality, unexpected medical events can affect anyone, at any stage of life.

A child breaking an arm, an emergency appendectomy, or an unplanned hospital admission can quickly result in multiple specialist accounts. Surgeons, anaesthetists, radiologists, and other healthcare professionals may all be involved in treatment, each charging independently.

While medical aid may cover a portion of these costs, employees could still face thousands or even tens of thousands of rands in additional expenses. Without appropriate protection, these costs are often funded through savings, credit cards, loans, or accumulated debt.

Why employers should care

The impact of healthcare shortfalls extends far beyond an employee’s medical bill.

Financial stress is one of the leading contributors to anxiety, reduced productivity, and lower workplace engagement. When employees face unexpected healthcare debt, the effects often spill into every area of their lives, including their ability to focus and perform at work.

“It affects employees emotionally, financially and in many other ways,” says Madonsela. “At the end of the day, it does affect their work.”

For employers committed to employee wellbeing, this presents an opportunity to strengthen their benefits offering and provide meaningful support when employees need it most.

Making gap cover part of the benefits package

Despite the growing importance of gap cover, many employers still provide only medical aid as part of their employee benefits programme. Gloria Madonsela believes this needs to change.

Gap cover should no longer be viewed as a discretionary extra but as an essential component of a comprehensive employee wellbeing strategy. Employers may also benefit from group arrangements that enable more favourable pricing and, in some cases, reduced waiting periods for employees.

A holistic approach to employee wellbeing

The greatest value is achieved when healthcare and employee benefits are considered together rather than as separate solutions.

BDO Wealth’s Employee Benefits and Healthcare divisions work closely to help employers create integrated wellbeing strategies that support healthier employees, improve workplace productivity, and strengthen financial resilience. By combining healthcare, group risk, retirement, and wellbeing solutions under one trusted advisory partner, employers can deliver a more cohesive employee experience while maximising the value of their investment in their people.

This holistic approach not only supports employee health but also helps reduce absenteeism, improve retention, strengthen the employee value proposition, and build a more resilient organisation.

As healthcare costs continue to rise, employers who take a proactive approach to protecting their employees from financial strain will be better positioned to attract, retain, and support the talent that drives their business forward.