SA seniors are bearing the brunt of South Africa’s ailing economy. How do you choose adequate and affordable healthcare which could avoid financial ruin?
South African senior citizens are bearing the brunt of South Africa’s ailing economy and as a result, face daily challenges in order to afford the basics like accommodation, groceries, and electricity. Medical aid premiums rise every year up to 8 – 10% or more, leaving senior citizens faced with the task of searching for affordable health cover.
In this piece below, we discuss the importance of having adequate healthcare cover in place and choosing your protection wisely, in order to avoid financial ruin.
As South Africa’s economy struggles towards growth in the face of major obstacles, senior citizens are bearing the brunt and having to dig deeper into their pockets to afford the basics like accommodation, groceries and electricity. With medical aid premiums rising by between 8-10% or even more, many South African seniors are weighing up their options and looking for ways to pay health cover for themselves and their loved ones for a lot less, and in some cases ditching health cover altogether, and opting for state medical care.
Bradley Du Chenne, CEO of online comparison website Hippo.co.za, believes that protection against high healthcare costs and loss of income due to illness are amongst the most important forms of insurance as they provide both health and financial protection.
“Nobody plans an illness, but most people will need medical care at some point, whether it be health-related or through an accident. Not having adequate cover could mean financial ruin due to high healthcare costs,” he explains.
To put it into perspective, and according to the World Health organisation (WHO), standard treatment for a common type of early-stage breast cancer would cost approximately 10 years’ worth of wages for the average South African[i]. Without insurance, most South Africans simply would not have access to this kind of money, and certainly senior citizens do not.
While the state sector is an option, it already serves approximately 46 million people and is therefore overburdened and severely under-resourced. In the USA, it is reported that 65% of bankruptcies filed were found to be primarily driven by medical issues[ii]. This is due, not only to the cost of care, but also the loss of income incurred where a breadwinner is unable to work due to illness.
In choosing the most appropriate type of healthcare cover, Du Chenne stresses the importance of understanding the differences between health insurance and medical aid, and their respective advantages and shortcomings.
“Although new regulations have seen greater alignment between the two, there are still some key differences that consumers should be aware of,” he says. “One of the key differences between the two is that medical schemes must provide for a basic set of benefits called the Prescribed Minimum Benefits (PMBs),” says Du Chenne. These include 25 chronic conditions, including hypertension, diabetes and asthma; 271 hospital-based conditions, including treatable cancers and other life-threatening conditions; and, all emergency care. Health insurance products, on the other hand, are not compelled to provide any minimum benefits.
Medical aids are regulated under strict principles of open enrolment, which means that they must accept anyone who applies to join, regardless of their age or health status. To protect the funds belonging to the existing members, they are permitted to apply ‘late joiner penalties’ for those joining the scheme for the first time later in life and to apply waiting periods where the new member has a pre-existing condition. For instance, if you had been diagnosed with a condition which requires surgery shortly before joining the scheme, the scheme would not be compelled to fund the surgery until the waiting period had been served.
Health insurance premiums may be based on various aspects like age, health status, family size and the like, and can therefore vary significantly.
Medical aid benefits, especially those related to hospital stays, are based on the actual cost of the treatment and will generally not limit the payment for dread diseases, while hospital insurance products generally pay out a fixed amount per day, unrelated to the actual cost of the treatment. Hospital insurance pay-outs are also capped to a certain amount per year and many may not cover the first 24 hours in hospital.
While all hospitals must ensure that you are stabilised in the case of an emergency, if you are a medical aid member, you will be admitted. However, if you have a health insurance policy, the hospital may require a guarantee of payment before admitting you.
Du Chenne says that medical aid premiums vary considerably, depending on the option you choose. He explains that, by choosing an option that offers a network of health professionals and hospitals which you are required to use, consumers could pay substantially less for comprehensive cover.
The sheer variety of medical aid and medical insurance options on the market can be dazzling – and with each offering a host of different tiers, it can be challenging to understand which one is right for you and what signing up actually covers you for. Using an online health comparison tool is a quick way to compare different health cover options, benefits, and costs.
“Once you’ve assessed your health needs against the variety of options offered by different medical aid schemes and medical insurance plans, it’s easier to make a decision about which you should sign up for,” he concludes.
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