It’s not a one trick pony anymore
I don’t think anyone can argue that the cost of medical aid is out of control. A once off, above average annual increase is bad enough but when it happens year after year, and often 4-5% over inflation, the compounded effect becomes a real problem and eats a bigger and bigger chunk of your disposable income. Not only do you have to contend with the increases, but silently, the benefits are also being eroded. The various ‘caps’ on cover don’t keep up with the increases, the ‘medical aid rate’ that used to be defined across the board, now differs from medical aid to medical aid and at 100% barely covers the cost of an entry level Cuban import. Many doctors now charge 500%, and this continues to climb. You’re stuck between a rock and a hard place – a bad event like an accident or heart attack can cost hundreds of thousands and if you don’t at least have a hospital plan, you have 2 choices. Find the money – or go into the public health system, and hope you come out.
Before the November deadline comes to change your plan, why not do a medical risk audit and see what combination you need…
- Ask your medical aid for a printout of your claims over the last 2 years, and have a careful look. Are you getting bang for your buck or subsidising several dozen hypochondriacs? Is there one member of the family that is using the lion’s share of the medical aid – can anything be done about it? When did your Medical Savings Account run out in he year? On average, how much did the medical aid pay out per provider and how much did you have to pay in excess?
- How much are you paying for the loyalty card, and is it worth it? 85% of people with a gym contract don’t use it – or if they do it’s at the absolute minimum required to keep it going. Warning – before you cancel the loyalty card please speak to your financial advisor because it might have implications on your life cover premium. The price increases of the loyalty cards are also above inflation.
- If you’re healthy, is a hospital plan a viable option? Play with the numbers from those statements. Compare the premiums of your existing plan with a plain hospital plan. What were your true expenses, this is the savings plus your out of pocket.
- Although we’re inclined to see all medical lumped in together, dentistry and optometry are treated quite differently and often have low caps on claims. A root canal plus crown or wisdom teeth removal can cost thousands, never mind orthodontics. Gap dental cover could fill this gap for you, at a far cheaper cost than upgrading your plan to include all sorts of stuff you might not need. It is important to note that gap cover is not a medical aid, it is governed with different rules and pays out on an event by event basis.
- You thought you were covered with your hospital plan – right? Not so fast. That is probably only the case if you go to a hospital in their network and all the doctor’s and specialists are also in their network. If any of those Terms and Conditions don’t apply – you could be asked for tens of thousands for in-hospital care and the doctors. There is Gap cover that will top this up, so at very least you know that if things get really serious you’re going to be okay. The same applies to ‘co-payments’. More and more procedures that used to require hospitalisation for a few days are handled in a day- clinic, and co-payments are becoming disturbingly common. MRIs routinely need co-payment as does dialysis.
- The incidence of Cancer is still growing, and the cost, especially of new-generation treatments like biologicals – is out of control, and often not covered by medical aids, or only to a limit. The good news is that cures for cancer are also increasing, if you’re concerned about cancer – perhaps because of a family history or lifestyle – check how well you’re covered. If you want to ensure you give yourself the best chance should you get cancer you can do one of two things – Gap cover or Dread disease cover (or even both).
- Dread disease cover on a life policy used to be a nice to have, and sold to clients that had specific concerns. Today, with the erosion of medical aid benefits it is a valuable addition to your medical risk cover. I have blogged on Dread disease recently (you can read it HERE) , so I won’t repeat myself, but not dread disease life cover is created equal. If it’s cheap, it’s probably nasty. Do yourself a favour, get some comparisons on different plans and different providers. This is a complicated field and not all brokers and advisors understand the nuances, but do yourself a favour and use a serious insurance provider that doesn’t flog stuff off the shelf like muffin mix.
So, in conclusion – get a ‘best of breed’ solution – tailor-made to you and your family’s needs and not just your pocket or what your broker can offer. Look at a blend of Medical Aid, Gap cover and Dread Disease risk cover. Not only are you likely to get better cover, but you are probably going to save money too. Always remember, in November every year you can upgrade or downgrade your plan for the next year without penalty. Your medical aid cannot refuse even if you’re really ill. Changing to another medical scheme is a mission and comes with waiting periods. This does not necessarily apply to Gap cover, and certainly doesn’t apply to Dread Disease cover. You need to make sure that is in place when you’re healthy.
Action: Use this time before the ‘window’ opens at the end of the year to design a ‘best of breed’ solution for you and your family. Unless you have an Independent Financial Advisor with access to all the different products, accreditation to medical aid and life insurance and access to a range of providers, you may have to do the work yourself. You’re welcome to contact me to help point you in the right direction.
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Author Dawn Ridler ©