Medical aid – why it’s so important
Those who are young and healthy or have limited finances might find it difficult to see why joining a medical scheme is so important. Sometimes it’s the first expense that gets cut when times are tough but cancelling or forgoing medical aid can be risky.
Medical aid is expensive and becoming more so every year. Often it sits at the bottom of the priority list, especially for the younger generation. After all, if you’re young and healthy, what could possibly go wrong?
On the other hand, many young adults stay on their parents’ medical aid until they start working and then go without cover until they’re older – or sometimes buy inappropriate health insurance.
The problem with health insurance
If you earn R6000 or more a month, you do not qualify for free, state healthcare. This leaves a large portion of the market poorly covered. Insurance companies saw this gap and exploited it.
Health insurance can be unreliable. Medical insurance products have significant and greater limitations – if you have any pre-existing health conditions or HIV, you will be considered high risk and therefore pay accordingly, or will be denied health insurance completely. This won’t happen when you join a medical scheme.
Prescribed Minimum Benefits (PMBs) are not covered by insurance companies in terms of a payment in full approach, and consequently offer significantly lower benefit levels. Ultimately, health insurance is only any good if you suffer from a non-PMB event.
Regarding hospitalisation, health insurance normally kicks in after a few days in hospital, creating a gap between admission and the payment period. Many never think to ask – how will I pay for this? What happens when the money runs out?
At the end of the day, these plans are only effective and affordable to those who have no alternative option available to them.
Younger people are increasingly developing lifestyle diseases
While lifestyle diseases, such as cardiovascular disease, obesity, diabetes and certain cancers used to be diseases of middle to old age, this is no longer the case. These lifestyle diseases are nipping at younger heels.
These diseases develop quickly – even in young people and they have the same risk factors as older people.
The mistake most young people make is relying on their healthy status. The obvious risk is the uncontrollable major medical expenses such as hospitalisation, accidents, chronic disease, cancer and HIV, which are prevalent among the youth as well as the old.
Women joining for maternity benefits
Between the ages of 20 and 35, the proportion of female members in a medical scheme rises and then falls off again after the age of 40. This is because women during child-bearing ages are more likely to join medical aids for maternity benefits.
The problem with not enough young people being on medical aid and too many women dropping their medical aid after having children is that this increases the cost of medical aid for everyone else. If everyone joined medical schemes early on in life and stayed on them, the cost would reduce for everyone.
“Why should I subsidise sicker members?”
In order for medical aid to work properly, you need healthy people to contribute so that there is enough money to pay for the needs of sicker members. A common complaint is “why should I subsidise the sicker members?”
The thing is, medical aid is a form of short-term insurance. Like phone insurance covers you when your phone is stolen, so your medical aid will be there for you when something serious happens.
Besides, medical aid isn’t just for heart attacks and cancer. Younger members are not immune to life – car accidents, infectious diseases and hectic social lives that result in spiked drinks or negative medication reactions, for example.
These are all real risks that can wipe out families financially if medical aid did not exist. Be realistic about the state of your health and don’t bank on the invincibility of youth or your current state of good health.
Is your kid taking a gap year?
At Cape Medical Plan if you have a child who is still on your HealthPact plan, don’t cancel it just because they are taking a gap year. Minors (under 21s) on Cape Medical Plan cost virtually nothing, so it is worth paying the contributions for a year even if they are not going to use it rather than having to face waiting periods when you reapply on your kid’s return.
Late joiner fees
Something that isn’t always discussed is late joiner fees. Those who are 35 years of age or older who have not had continuous previous medical scheme cover could receive a late joiner penalty, which results in an additional 75% contribution, depending on the years without medical cover. These penalties are not a once-off charge. They are for life.
What can Cape Medical Plan offer the younger generation?
HealthPact Premium is the perfect “starter plan” for young, healthy and active members. Not only will you receive comprehensive and affordable cover for big events or emergencies that require hospitalisation, you’ll also have a number of non-hospital benefits available to you.
Although this plan is simple and straightforward, it is a lot better than any medical insurance product you are likely to find – PMBs are covered in full and you’ll receive the cover a younger person might likely need most.
We are always available to discuss our plans and what will suit your pocket and lifestyle. You can give us a call on 021 937 8300 or visit www.cmp.co.za.
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