Think laterally – Medical Risk

Home » Blog » Uncategorized » Think laterally – Medical Risk
canna
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.

Sign up for our Newsletter HERE. Follow Dawn on Twitter HERE

You are welcome to share on Twitter or LinkedIn. If you would like to republish content, please contact us HERE

Author Dawn Ridler ©  

Related Posts
Ms Independent – like it’s a bad thing
How to stop coming off second-best In many ways I consider myself lucky enough to come from a family where the girls were encouraged to have careers and have financial independence. ...
READ MORE
Once upon an Economy
Once upon an Economy A man walks into a B&B in Wakkerstroom, putting his bags on the floor in front of the reception. “I’d like to check out your rooms and pick ...
READ MORE
7 things to do when changing jobs that will impact on your finances
7 things you should do when you change jobs Sometimes the little decisions that we make, or procrastinate over when we change jobs can have a significant impact on your long ...
READ MORE
Treating Customers Fairly – another toothless dog?
Treating Customers Fairly? You've probably been hearing a lot of this in the news, and no doubt more is to come. Is it going to be another toothless dog in the ...
READ MORE
Cheat sheet… to sniff out cheats
If it sounds too good to be true… One of the reasons I write these blogs is to rip the veneer and mystique off the financial services industry so that everyone ...
READ MORE
Retirement reform: Full blown collywobbles
Retirement reform - kicking the can down the road Since a recent blog HERE, where I tried to decode the facts, rumours and proposals in the retirement reform arena, the whole thing ...
READ MORE
Hang on a second! – Ceding policies
Ceding Life policies – good idea or not? Banks and other financial institutions often want to have first bite of your estate if you die and owe them. Hence the 'cession' ...
READ MORE
When debt is ravaging your wealth
5 steps to getting out of debt Plus ça change, plus c'est la même chose – the more things change the more they stay the same – was one of my ...
READ MORE
Taxed to Death – Davis Tax Committee
The Davis Tax Committee on Estate Duty recommendations summarised - The first interim report on Estate Duty published by the Davis Tax Committee (DTC) was published for comment last week and ...
READ MORE
Delegate, Abdicate or Collaborate?
When can you do it yourself? When it comes to managing one’s personal finances, there are a number of different strategies, some more effective than others. Trying to navigate the murky ...
READ MORE
Ms Independent – like it’s a bad thing
Once upon an Economy
7 things to do when changing jobs that
Treating Customers Fairly – another toothless dog?
Cheat sheet… to sniff out cheats
Retirement reform: Full blown collywobbles
Hang on a second! – Ceding policies
When debt is ravaging your wealth
Taxed to Death – Davis Tax Committee
Delegate, Abdicate or Collaborate?
in Uncategorized Comments are off