Choosing a medical aid is like trying to decipher the menu at that dodgy restaurant that serves grills, seafood, pizza, Mexican and sushi. The choice is overwhelming, and you don’t want to make the wrong choice because there may be unpleasant consequences…
South Africa has 18 registered open medical schemes, some of which have dozens of plan options. If you have an existing medical aid, there’s an ‘upgrade window’ in November and December when you should reflect on your health needs and decide if you need to change your level of cover for 2022.
Confused? Here’s a quick guide.
Are all your pre-existing conditions covered?
There’s no crystal ball to warn of unexpected health challenges next year. But you should evaluate your current health status and that of your dependents. Make a list of any pre-existing medical conditions, chronic medication and treatments that you or your dependents might require and check your list against your medical scheme’s benefit list.
This exercise can help you decide if your plan will cover current and expected future medical expenses, or if you should upgrade to a more comprehensive plan.
It’s a real slog to do this, but it’s important to prevent any nasty surprises.
Are you thinking of starting a family?
As mentioned, you can’t upgrade your medical aid plan during the year without paying penalties — this can only be done during the upgrade window. If you’re planning to have a baby next year, upgrade your plan to one that covers all the expenses linked to pregnancy, birth and post-natal care.
Same story if you’re planning on getting married or moving in with your partner. Sit down and discuss your respective health needs and existing medical aid plans. Compare the benefits and consider adding one partner to the other’s medical aid — it often works out cheaper.
Does your scheme offer medical savings?
Many medical aids offer a combination of a hospital plan and a medical savings portion. The hospital plan is like insurance — it covers costs if you need to be hospitalised. The medical savings component is a percentage of your contributions that’s held in a separate account to pay for GP visits, medicine purchased from a pharmacy and other smaller expenses throughout the year.
A good hospital plan is non-negotiable. Private medical care is exorbitantly expensive — you need to know that you’ll be covered should you have to spend time in hospital.
And while it’s also important to maintain a medical savings account, there are pros and cons to letting your medical aid administer this account. The pros mostly involve easier admin: you’re ‘forced’ to save; payments automatically go through if you have a positive balance; and it’s easier to do your tax return because your scheme will provide you with a certificate of all expenses, including those that you had to cover yourself when your funds were depleted.
The cons? Your medical aid scheme will usually charge a fee to administer the account, and you don’t earn any interest on your savings. If you put money into an interest-bearing account instead and use that to draw from for day-to-day medical expenses, you’ll get more bang for your buck.
If you’re organised and you’re not afraid of managing your own finances, a separate account is the way to go. You’ll pay less in medical aid premiums, earn interest on money you don’t spend, and you won’t be hampered by scheme rules regarding what you can claim for and what you can’t. Use 22seven to track your medical expenses so that you can put all your medical expenses on your tax return.
However, if you’d prefer to keep all your medical stuff under one umbrella, choose a plan with a medical savings account.
Ask for help
If you work for a big company, ask HR if there’s a representative who can help you unravel the complexities of their medical aid options. Many corporates offer their employees this service. Otherwise, consider speaking to a financial advisor with experience in healthcare, who can help you choose the best solution for you and your family.
Here’s to good health in 2022!
