Medical aid considerations

As we begin the run-up to the festive season, sounds of yuletide carols and outdoor concerts will soon fill the air, and you’ll find yourself pondering philosophical questions, such as who exactly likes Christmas pudding and why do we only eat cranberry sauce once a year? With all the merriment, it’s easy to get caught up in advent adventures and forget the more clerical side to the Christmas countdown. For, come the new year, along with all our resolutions to shed our newfound pounds, we will inevitably be faced with an increase in our medical aid schemes.

Some medical schemes have already announced their contribution increases for 2018 and, as of the start of October, Genesis Medical Scheme has the lowest increase at 5.8%, while Medshield has the highest at 10.9%. Before you look aghast, the good news is that Discovery Health and Bonitas Medical Scheme have announced relatively low increases, which will potentially put other schemes under pressure to stay below the 10% mark, even though not all of them will be able to do this. In fact, according to an FA News article, Bonitas announced its lowest increase in six years thanks to robust cost-containment initiatives that have enabled the medical scheme to keep the weighted average contribution in single digits for 2018.

According to a recent article published on Fin24, over the last 16 years, the average yearly increase of medical scheme contributions has been 7.6%. This is a phenomenon that is driven by the high cost of medication, new medical technology, and South Africa’s weakening currency.

South African medical schemes continue to face the challenge of making quality healthcare more affordable and accessible. They are required to focus on balancing costs, while ensuring members continue to receive good benefits. After a challenging year for the healthcare industry, with medical schemes facing escalating healthcare costs, as well as having to comply with the strict parameters of the Medical Schemes Act, increases are unfortunately inevitable. However, although you cannot avoid an increase, it’s important to work out how you will factor this into your budget in the new year. It’s also worth taking the time now to reflect on whether your chosen medical scheme is meeting your requirements.

In times of political instability and economic uncertainty, healthcare costs and claims tend to increase — particularly those regarding anxiety and depression. Sadly, recent studies show that over 17 million people in South Africa are dealing with anxiety disorders, and 1 in 3 of our countrymen are expected to be affected by a mental illness in their lifetime.

When considering a medical scheme, it’s important to review its benefits and programmes, as well as its costs. For example, in light of the aforementioned statistics, does your scheme offer a suitable mental wellness programme? Are there sufficient benefits for your family, as well as benefits that help to encourage positive lifestyle changes and focus on preventive care, such as pap smears for women over 21 and mammograms for women over 40?

Along with fairy lights and tinsel, the increase in medical aid prices will soon be upon us, so take a moment before you get caught up in Christmas crackers to decide how you’re going to reconcile this increase and whether your medical aid scheme is the right one for you. Don’t hesitate to arrange a meeting to discuss your needs and financial capacities.

Posted in Blog, financial-planning.