Why You Shouldn’t Cancel Your Medical Aid
With each passing year, the cost of living in South Africa becomes more expensive. And the annual increase in medical aid contributions simply adds to this cost. With this in mind, you may decide to cancel medical aid in order to cut down on expenses. But while you will save money on monthly contributions, cancelling your medical aid outright can have negative consequences.
“Should you or someone in your family be faced with an emergency and need to be admitted to hospital without a medical aid policy, it can be absolutely devastating to your financial circumstances,” says Jeremy Yatt, Principal Officer of Fedhealth Medical Scheme. “Even having your wisdom teeth removed, which takes only a few hours, can cost upwards of R13 000.”
Don’t Cancel Medical Aid – No medical cover at all
The main reason not to cancel your medical aid is that you won’t have any medical cover at all. So, should you need admission to hospital for any reason, or if you fall ill and need chronic medication, you won’t have any financial help to pay for these medical expenses.
Yes, South Africa does have state-run medical facilities where you pay according to how much you can afford. However, these institutions are typically overcrowded and understaffed. So there’s no guarantee that you’ll get the care you need.
So, you’d rather benefit from private medical care. But then you’ll be liable for a bill of thousands or even hundreds of thousands of Rands. And that is far more than the cost of your monthly medical aid contributions.
You may be healthy and think you won’t incur medical expenses any time soon. However, accidents and illness can happen at any time. So it’s never a good idea to go without this safety net.
Don’t Cancel Medical Aid – Waiting periods
Some people cancel their medical aid policies when times are tough. And have every the intention of reinstating it again when they can afford it.
“The problem with this is that as a new member (even if you were a member before), you’ll most likely be subjected to a waiting period during which you have to pay contributions but aren’t covered,” says Yatt. The length of this waiting period will depends on your health and how long you’ve been without medical aid cover. And it can range from a three month general waiting period to a 12 month condition-specific waiting period.
Are hospital cash back plans an alternative?
Many people consider hospital cash back plans (HCBPs) as a possible alternative to a medical aid policy. But these two products are actually completely different.
A medical aid plan – including even the most basic hospital plan – will cover most if not all of your expenses should you be admitted to hospital, including doctor care, your hospital stay and any take-home medication. In contrast, a HCBP pays you a daily cash amount while you’re in hospital which is usually far less than the cost of a day’s stay in hospital. What’s more, most HCPBs only start paying you out if you’re in hospital for more than three days. So if you’re in hospital just for a day procedure, you won’t get any money at all.
So, what’s the alternative?
If you’re struggling financially and are considering giving up your medical aid, it’s worth looking at any other avenues to save money, rather than cancelling your health coverage. Says Yatt, “Of all the expenses, medical aid should be the last one to consider cutting, because if you need to pay for medical expenses, they’re extremely expensive.”
Instead cut down on non-essential expenses like entertainment and travel, and start a monthly financial budget and stick to it. By taking these steps, you’ll find ways to stretch your money further each month while still having cover should you find yourself needing medical care.