Waiting until you are older and really need to be on a medical aid scheme can cost you more than joining now.
Are you waiting to join a medical aid scheme because you think you do not need it right now, as you are fit and in good health?
If you are, think again: this decision could come back to bite you and cost you a lot of money.
Waiting too long to join a medical scheme could cost you dearly later in life, when late joiner penalties can significantly increase your monthly medical aid contributions, Michael Emery, marketing executive at Ambledown Financial Services, says.
He points out that many young South Africans opt not to join a medical scheme because they are currently in good health, or because they cannot afford medical scheme membership.
However, he says, neglecting to do so can prove costly as you become older and at greater risk of illness.
“South Africans should ideally join a medical scheme as soon as they start working and before they reach the age of 35. Starting early is an investment in the future of your health, and it is as important as retirement savings.
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Investing in a medical aid scheme is a good idea
“Everyone should have access to quality health care. As soon as you can afford it, you should invest in cover that offers primary care, diagnostics and hospital treatment. If you wait too long to join a medical scheme, your contributions will be significantly higher because you present a greater risk to the scheme.”
Emery says late joiner fees and waiting periods are designed to prevent misuse of the medical scheme system and protect medical scheme members who have been members for many years.
“Late joiner fees and waiting periods could be seen as discriminatory in some way, but they are not. They are there to protect the people who have been contributing to the healthcare fund for a number of years from those who may try to exit and enter the healthcare system as and when they need to.
“If people join a medical scheme only once they know they will need medical treatment, it presents a greater risk to the scheme and pushes the premiums up artificially. Late joiners who had no cover for many years are also at greater risk of having health issues that were not diagnosed or properly managed for years.
“Medical schemes calculate late joiner penalties based on your age at the time of joining the scheme and the number of years you have not been a medical scheme member. The penalty is generally a percentage of the base contribution rate and could add as much as 75% to your monthly medical aid contribution.”
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Medical aid contributions are high, but still worth it
Emery concedes that the high cost of medical scheme contributions can deter many South Africans from investing in their health, but he notes that numerous entry-level medical schemes and medical insurance products are available in the market.
“These products may not cover the full cost of certain treatments, but they can be augmented by gap cover, which is an insurance product to cover shortfalls in medical scheme cover. Gap cover is designed to help you pay for hospital treatment where medical charges exceed what medical schemes will pay for.”
He says medical inflation is driving up the cost of healthcare beyond the limits of what medical schemes will cover.
“In some cases, medical practitioners charge as much as 400% of the medical scheme rate or more. Gap cover helps you pay for essential in-hospital and defined out-patient medical treatment that might otherwise cause serious financial hardship for you and your family.
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Mitigate risks of medical aid shortfalls with gap cover
Brian Harris, general manager of operations at Turnberry Management Risk Solutions, agrees and says healthcare needs change throughout life, but one constant remains: the risk of medical expense shortfalls.
“As the cost of quality medical care continues to rise and certain medical conditions become more prevalent across all age groups, the likelihood of experiencing shortfalls grows, even if you are on a comprehensive, top-of-the-range medical aid plan.
“Gap cover plays a vital role in protecting individuals from unexpected out-of-pocket expenses. Securing gap cover early not only ensures comprehensive protection from the cumulative effect of shortfalls but can also help to lock in lower premiums, reducing financial strain later in life.”
Harris also warns against getting gap cover too late.
“When you are young and healthy, it is easy to dismiss gap cover as unnecessary. However, the reality is that accidents and medical emergencies can happen at any age.
“Sports injuries are increasingly likely as younger people realise the importance of staying active and stress-related conditions that can result in chronic illness or the need for surgical intervention are becoming increasingly common among younger individuals.
“Many young adults are also starting families, making maternity benefits a crucial consideration.”
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Why you should get gap cover when you join a medical aid scheme
He warns that once you hit your thirties, the likelihood of developing chronic conditions, such as high blood pressure, high cholesterol and prediabetes increases.
“Women may experience reproductive health issues and the risk of conditions such as breast cancer among younger women increases.
“If you have children, visits to the casualty ward due to accidents and illness become a frequent occurrence. Gap cover can help reduce financial stress by covering shortfalls in these unforeseen medical expenses.”
By your forties, additional concerns such as joint pain, back pain, hernias, kidney stones and gallstones become more common. Cancer risks also continue to rise, and while maternity benefits may no longer be a priority, the need for medical cover for active children remains.
In your fifties and sixties, chronic diseases such as heart disease, diabetes and cancer become more prevalent, alongside musculoskeletal issues that may require costly treatments or surgery. Gap cover helps alleviate the burden of these increasing medical costs, Harris says.
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When you are older you definitely need medical aid
“As you move into your seventies and eighties, the risk of serious health conditions intensifies, including cognitive decline, mobility issues and chronic illnesses.
At this stage, access to quality healthcare is essential and the financial impact of medical expense shortfalls can be significant.
“Comprehensive gap cover then ensures that you are not faced with overwhelming out-of-pocket expenses when you need medical care the most.”
Harris says when you select a gap cover policy, it is important to consider the coverage limits, exclusions and benefits.
“One significant advantage of securing gap cover early is that it helps you to avoid higher premiums later in life.
“Once you turn 65, premiums are charged at a senior rate, which is considerably more expensive. Staying on a policy from a younger age allows you to maintain lower premiums and ensure ongoing cover, providing long-term financial benefits while ensuring you’re covered when you need it most.”
