How important is medical aid?
Can you afford it?
Medical aids have changed over the years. Traditional schemes used to cost an arm and a leg and covered everything, but today you can select the cover you need or can afford. You can choose from hospital cover for planned procedures and emergencies to hospital cover with a small savings facility towards day-to-day costs.
In my experience of helping clients select the right plan for their needs, I have seen far too much focus on day-to-day expenses and an ignorance of emergency costs. Worst case scenario your dentist bill will be a few thousand rand (and 90% of the time you can make a payment arrangement). However, the cost incurred in an emergency could set you back millions. In 2013, Discovery Health’s biggest medical claim was over 6 million rand. On average, their claims were more than R200 000 per incident.
Today, you can expect to pay just over R2 500 per night in hospital, excluding your medicine. ICU and theatre costs can be as much as R3 000 per hour.
It is easy to make arrangements for small day-to-day costs, but when it comes to emergencies and their repercussions, you simply cannot afford to be without medical aid. Unless you’re happy to spend the rest of your life paying off medical bills.
What happens in an emergency?
In an emergency, a medical aid can be a lifesaver. Take a car accident for example. The first ambulance to arrive will most probably be a private one. You will be asked for some form of deposit. If you can’t pay this, you will have to wait for a government ambulance.
On your way to the hospital, you will be asked whether you want to go to a private or government hospital. With no medical aid, the private hospital will require a 50% deposit of your estimated cost. If you can’t pay this upfront, you will not be admitted. You will then be rushed to a government hospital where you will have to contend with hundreds of people in a similar emergency.
In South Africa, only 7 million people are in private health care, which leaves government hospitals with 53 million people to serve. And they simply do not have the capacity to do this.
To ensure your best chance for survival in a life-threatening situation, you just cannot afford to take a chance and ignore the importance of a medical aid.
Grant van Zyl
Certified Financial Planner®
October 3, 2016
Grant van Zyl