General: Many People Paying “A Third Too Much” for Medical Aid
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Consumers could be paying nearly a third too much for their medical aid because they do not review their cover regularly, according to www.justmoney.co.za, Gauteng, South Africa’s online guide to money.
As South Africans feel the pinch and the cost of medical cover continues to rise, people are tempted to cancel their health cover. But www.justmoney.co.za say consumers should first review their existing policy and then shop-around other providers to find the most affordable and suitable medical aid.
Paul Beadle, managing director of www.justmoney.co.za, says: “The difference between a standard hospital cover for a family of four and the all-singing, all-dancing ‘lifestyle’ package could be as much as R4,000 per month. If you do not need all those extras, you are better off putting the additional money into an investment account. And if you can’t afford such a high premium, find a policy that suits your pocket instead of going without vital medical aid cover.
“Most people only review their scheme once every eight years, so consumers may well be paying too much for the wrong kind of cover, or for policies with flashy lifestyle benefits they don’t actually use. It’s no wonder that brokers have told www.justmoney.co.za that when people review their cover, many end up saving themselves 30% in premiums.”
Research by www.justmoney.co.za earlier this year found:
* 25% of people could no longer afford to pay for their medical aid
* 44% of people never shopped-around for cheaper medical aid
* 16% of people had not reviewed their medical aid for at least five years
Beadle says is important for people to seek the advice of an independent broker and compare at least three different medical aid policies. He says: “The medical aid market has changed a lot in recent years, so consumers need the help and advice of a qualified medical aid broker who can review their circumstances and recommend the most cost-effective cover for their situation.”
Here are www.justmoney.co.za’s 12 top tips to finding the right medical aid:
12 top tips
1. Review you medical aid regularly – Your circumstances and your needs might have changed, so your current scheme may not be cost-effective anymore. Shop-around for quotes from at least three different schemes to compare features and costs – and if your broker will only offer you one scheme, get a new broker!
2. Do you need the bells and whistles? – If you don’t need gym membership or haven’t made use of the theatre ticket discount in a while, do you really need the extra cost of lifestyle benefits? Rather save the money and put it in a savings account
3. How healthy are you? – Unless you visit the doctor every week or have a chronic medical condition, then a hospital plan should be sufficient for most people. But check the coverage because some schemes are limited to certain geographic regions
4. Do you need a medical savings account? – If you don’t visit the doctor that often, instead of paying into a medical savings account, put the money into an investment account. You can access the money if you need to pay for medical bills, but if you don’t you’ll get the growth in interest instead of the medical aid scheme
5. Do you understand your current scheme? – Medical aid schemes can be complex, but that’s all the more reason that you understand what you are paying for, what cover you are getting and what the restrictions are. Otherwise, how will you know if you have the best deal?
6. What can you afford? – You should not be paying more than 10% of your salary on medical aid. If affordability is an issue, consider joining a network medical aid scheme – the costs are lower but you are only allowed to use doctors and hospitals linked to the network. But if you are generally healthy and have easy access to the network’s facilities, it could make financial sense. You will still get emergency cover, if you have a traffic accident, for example
7. Check your scheme’s financial fitness – Your medical aid needs to have enough money paid in by its member to cover all potential claims. Visit the Council for Medical Schemes (www.medicalschemes.com) and check out the balance sheet section of the Council’s most recent annual report to find out the status of every scheme currently operating – a scheme should have a solvency ratio of at least 25%
8. Do you still have dependents aged over 21? – Some schemes charge adult rates if your kids are over 21 and are no longer studying, even it they are still living at home, whilst others only levy the higher rates when your child dependent reaches 27. Check your scheme’s rules because paying adult rates for your son or daughter can add a hefty whack to your monthly premiums
9. If you swap schemes, you probably won’t face a waiting period – Medical aid providers cannot by law impose a three-month waiting period when you move to a new scheme if you have been with the previous scheme for at least-two years without any breaks – so don’t let the fear of three months with no cover stop you from shopping around for cheaper medical aid
10. Not all schemes charge a late joiner fee – If you have not had medical aid for a while, ask your broker to advise on which schemes do not charge a late joiner fee. If you have older family members who do not currently have medical aid, you might be able to get affordable cover for them by making them your dependents
11. Is your broker still talking to you? – If you haven’t heard from your medical aid broker since they sold you your current scheme, then you should look for a new broker along with a new scheme. A good broker will keep you up to date with new developments and new services, helping you to review your current plan and circumstances regularly to see if you can find a better deal
12. There are no negotiations! – Unlike short-term insurers, medical aid providers will not negotiate lower premiums with you, no matter how long you have been with them, so you have to do the comparison yourself via a broker
www.justmoney.co.za has been created to help South African’s save money by demystifying financial services and helping them to make informed decisions about their money.
Completely independent and unbiased, www.justmoney.co.za also features a host of comparisons, tools and guides, enabling people to search and apply for new products, all online and completely free of charge.
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