By: Annele Oosthuizen
As we approach the end of the year, it's time to make important decisions about your healthcare plan. Medical schemes, health insurance providers, and gap product companies are announcing their contributions or premium increases and benefit changes for 2025. This period, from October to December, is crucial for reviewing your healthcare options and adjusting where necessary.
Healthcare decisions are rarely straightforward and you may feel overwhelmed by the choice of cover you'll need for yourself and your dependants in the year ahead. It's essential to understand any changes to your current plan’s benefits and whether they meet your future needs. However, remember that if you're satisfied with your current level of cover, you're not obligated to make any changes.
Navigating healthcare costs
As the cost of healthcare continues to rise, many may feel pressure to reduce expenses while ensuring access to quality private healthcare. You may consider switching to a more affordable plan, but it's crucial to consult with your accredited healthcare adviser before making any changes. A thorough understanding of the benefits, costs, and implications is necessary, as you may not have the opportunity to alter your plan again until late 2025 for the 2026 period.
Before downgrading or upgrading your plan, consider the long-term impact on your healthcare needs and financial planning. While buying down could save money, upgrading might offer additional benefits and peace of mind. Balance is key, and professional advice is essential to avoid decisions that could lead to future financial strain.
Example 1: Downgrade recommendation
Mpho is a young single professional who has chosen a comprehensive option on a medical scheme. She currently does not have any chronic conditions or any planned medical procedures in the coming year. She has used a third of her medical savings account on her medical aid. Her contribution is currently R9 300.00pm. Upon consulting with her healthcare advisor and performing a financial needs analysis, Mpho’s option was downgraded to a lower plan that was suitable for her needs. Her new medical aid contribution changed to R4 500.00pm, saving her R4 800.00 per month.
Example 2: Upgrade recommendation
John is a professional with two dependants on his medical aid. John sought advice from a healthcare adviser because their medical savings account was depleted in the first quarter of the year due to high day-to-day expenses. During the year, he was diagnosed with a chronic condition and is due for a surgical procedure in the coming year. His out-of-pocket monthly medical expenses are R3 800.00 and his medical aid contribution is R6 248.00 for the whole family. Total medical expenses including out-of-pocket expenses is R10 048.00 per month.
Upon consulting with his healthcare advisor, he was advised to upgrade his option to access his chronic benefits, have a higher medical savings account and reduce out of pocket medical expenses. His new medical aid contribution would be R7 942.00, he achieved a saving of R2 106.00 per month.
What to consider when reviewing your plan
When evaluating changes to your medical scheme or health insurance, it’s important to look beyond costs. Factors to consider include:
· Your health and any pre-existing conditions.
· The health needs of your dependants.
· Claims history and potential future medical requirements.
· Changes in dependants, such as adding a newborn or removing an adult dependant.
· Level of affordability and budget considerations.
Also, don’t forget the unexpected. Access to costly treatments may arise in the coming year, and ensuring you're adequately covered for out-of-pocket expenses is critical. Your healthcare consultant can help ensure you understand your benefits and any potential shortfalls in your cover.
Comprehensive planning with gap products
Medical scheme benefits shouldn’t be considered in isolation. You should look into how gap products can offer additional cover for out-of-pocket expenses such as deductibles, co-payments, and out-of-network fees. Gap cover is particularly useful for in-hospital treatment, where you may face significant shortfalls from specialists or anaesthetists. This added protection can ease the financial burden of unforeseen medical expenses.
Key points to consider
When considering changes to your medical scheme benefit option, it’s essential to evaluate several key factors:
· If you opt to downgrade, be aware of the potential impact on your healthcare cover, especially for future treatments.
· Seek financial advice, as medical aid benefits are a vital component of your financial portfolio, and any shortfall could directly affect your financial stability.
· Review whether your current benefits provided sufficient cover this year or if you were left out-of-pocket frequently.
· Consider chronic condition coverage, the impact on your chronic medicine benefits, and any upcoming planned medical procedures.
· Additionally, assess the level of out-of-pocket expenses you're comfortable with and whether you need comprehensive coverage or just a hospital plan.
· Explore if gap cover might allow for a more affordable scheme option, and evaluate the long-term financial implications of waiting periods, late joiner penalties, and network restrictions.
By carefully reviewing your healthcare plan and considering the advice of your accredited consultant, you can make a decision that balances your healthcare needs and financial well-being for the year ahead.
* Oosthuizen is a consulting manager at Alexforbes Healthcare.
PERSONAL FINANCE