Planning For Your Healthcare Within a Budget

The cost of living is rising in many areas of the world, and since May 2022, consumer price inflation in South Africa has been higher than the country's Reserve bank's goal range of 3% to 6%. Head of Advice, Johan Gouws guides on how to navigate this from a wealth perspective in his latest piece Inflation – The Enemy of Wealth.

With this in mind, we are quick to evaluate our expenses and what needs to be cut. Medical aid often comes top of the list for many consumers, however, that should not be the quick opt-out solution, because in fact, will you really be saving money? Cancelling your medical and health insurance completely might have serious implications for your health and finances.

For instance, take Murphy's law: anything that can go wrong will go wrong. An unexpected medical expense will lead to you having to pay for the full cost of the medical treatment– hospitalisation and cancer treatment can run into the hundreds of thousands.

Start by first assessing the key factors that contribute to the final decision concerning your healthcare needs. Do I understand my healthcare requirements? To verify that you have assessed your requirements (both past and future), ask yourself: What was my claim experience in the previous years? Did the family's day-to-day benefits run out; how much out-of-pocket costs did I have to cover? And what costs do I expect to incur in the future?

This will allow you to gauge what benefits you value and how much you spend on average on the various “benefit categories,” making it easier to identify which plan would meet these needs. Get to know your health plan, what is deductible, your network of hospitals and co-payments. Take advantage of money-saving solutions.

If you are finding it difficult to remain on or cannot afford to join a medical scheme, there are primary health insurance options available that are more clearly priced. Considering the poor state of the SA economy and the escalating cost of medical scheme cover, more people are having to consider these alternatives which are proving to be a suitable substitute considering the circumstances. However, it is important to note that to keep these products affordable, they are mostly focused on expenses such as general practitioner consultations, prescribed medication, basic dentistry, and some optometry cover.

The benefits are subject to strict network-provider rules, including a defined limit for emergency hospital stabilisation because of an accident or trauma, and illness might be built in, but this has an impact on the price of the product.

Therefore, these health insurance products are not ideal for those faced with the excessive cost of healthcare needs such as chronic conditions or oncology. Also, it is important to point out that primary care insurance products do not cover private hospital costs related to elective procedures.

Unexpected healthcare costs can be stressful. As we try navigating this remember that the best way to plan for your healthcare within a budget is to stay healthy. That is, of course, easier said than done. However, maintaining a healthy weight, and taking regular exercise reduces your chance of health issues. Staying healthy allows you to avoid expensive testing and treatments for chronic diseases like diabetes or heart disease.

So, with a variety of options, budgeting for your healthcare is possible. To clear up any medical aid uncertainty, I strongly advise you to talk to your Sasfin Healthcare Consultant who can further advise on your medical scheme, health insurance, or gap insurance to protect yourself against these unexpected costs.

We have a wealth of knowledge on retirement planning. Speak to a Sasfin Healthcare Consultant for the best advice on medical schemes, health or gap insurance.