We face two threats of high costs - private hospitalisation and dentistry.
These are the basic areas you should cover with a medical aid.
All medical aids, including in-hospital only plans, must offer Prescribed Minimum Benefits (PMB) cover. This includes around 270 hospital procedures, treatment and medicines for 26 chronic illnesses.
PMBs apply in respect of conditions that, if left untreated, will result in death or detrimental quality of life. In terms of current legislation, this is cover you are entitled to from any medical aid plan.
Private care is just so expensive and the time to save a sufficiently big fund is just too short! The costs of hospitalisation are impossible be quantify.
Diverting money to build your own medical fund, from savings meant for your #1 goal of a pension, is not a recommended financial strategy!
Joining a affordable in-hospital only plan and saving towards a pension is the real goal you should have!
If you need emergency treatment, without a medical aid, you will have to pay a deposit, which can be substantial.
You may be denied treatment and referred to a government facility if you do not have the money.
And what if you need a hospital after hours?
Having a medical aid hospital plan will ensure you get immediate admission to hospital - with no co-payment!
A new medical scheme member, over the age of 35, is subject to a late joiner penalty.
The amount of the penalty is based on the number of years you have not been a medical aid member – the greater the years - the higher the penalty
It is a monthly penalty – for life and can be as high as 75% per month!
You pay an added amount (as part of your monthly premium) which is added to this fund. However, you cannot use the money as you wish.
The medical scheme dictates how you use it.
They do not pay interest on your savings – like you would get in a bank account.
Yes, they do offer you a year’s worth of savings upfront and it takes time to accumulate your personal savings fund.
But, on plans with a safety net should you use your savings, there is a fee!
You don’t get your full allocation of monthly savings amounts in your fund.
Your own savings fund can be used for any other emergency expenses you may have to face, not like in a medical aid where you are restricted to only certain claims.
If you can afford to pay for your own day-to-day costs (through your own savings) and accept the small risk of self-funding whilst your savings grow, then maybe avoid plans with savings and join an in-hospital only plan.
Now you can take control of your medical aid costs and get the finest in-hospital and essential dentistry cover - all in one plan!
Some plans pay claims at 200% or 300% of medical aid rates, offering you a lower claim shortfall, but these are more expensive.
Increasingly, plans also have procedure co-payments, which you have to fund.
This separate insurance plan will cover most in-hospital claim shortfalls and scheme co-payments.
By adding a Top Up plan you can improve your medical aid benefits, so-much-so, that you can even consider joining a lower cost/benefit plan - with a lower premium - and still have an excellent, no risk medical aid for virtually the same premium as the higher medical aid!
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You must consult the schemes/company product brochures and rules for comprehensive benefit descriptions.
Medical aid pays healthcare costs.
What if a disability STOPS your income?
Last update: May 6, 2021
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Medical Aid Authority Peter Pyburn.
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