Annual medical aid premium increases for 2018 are once again measuring in excess of inflation, and this often comes with a decrease in benefit levels. This means consumers will have to make increasingly tough choices if they don’t want to be caught on the wrong side of a medical bill.
“Regardless of the information available to consumers, it is astonishing how many people do not pay close enough attention to changes in their benefit levels versus premiums payable from year to year,” says Jill Larkan, Head – Healthcare Consulting at leading wealth and financial advisory firm GTC.
She believes this is due to the continued perception that medical aids are too complex, even though healthcare advisors are always available to explain changes and their impact.
“Reviewing your medical aid changes for the year ahead does not have to be an onerous task. It can be simplified into six questions which all consumers should ask themselves before deciding whether to stick to their current plan or whether a change would bring much-needed savings, or appropriate benefit increases.”
1. Are you anticipating big medical events for next year?
Life changes such as childbirth, or decisions to have significant elective operations or even special dental treatment undertaken, will require due consideration when evaluating your medical aid for next year. In the case of surgery, you should consider not only the actual procedure, and possibly an extended hospital stay, but also the cost of specialists and after-care.
2. Would a network work for you?
Many medical aids offer a premium discount for using practitioners and hospitals within a certain network. Members should seriously consider these network options, paying special attention to doctors and specialists they may need, as well as whether the hospitals or clinics suit their medical requirements and are suitably geographically located. Reductions in premiums when choosing a network plan could offer significant savings with practically the same benefits.
3. How far did you get on your Medical Savings Account this year?
It is imperative to take stock of your actual medical aid savings account usage for the previous year. If it is usually depleted by March, you might consider upgrading to a plan that provides for additional savings. If upgrading is just not a cost-effective option, you should consider adding extra money to a secondary savings account, to prevent unplanned medical expenses eroding your monthly discretionary income.
4. How much more can you afford to pay in the coming year?
Review the actual increase of your premium announced by your medical aid and compare it to your salary. In most cases, an person’s income does not grow at the same pace as medical aid expenses do. Rather than simply carrying on with the usual plan, you should do an honest evaluation of benefit usage and risk undertaken, to decide whether you can still afford their current level of benefits with a lower disposable income.
5. Is your medical aid presenting its changes to you?
You should review your medical aid with a professional healthcare advisor who should be able to outline in detail the changes for the new year. This may be face to face, in scheduled individual member sessions, through targeted informative emails, or through the distribution of videos made available to explain the expected plan changes for next year. It’s also important to study the changes to the benefit areas which affect you most and take note of benefit losses or decreases.
6. When do you need to make a decision?
Make sure you know the cut-off dates for changes to plan types and ensure that all documentation is submitted on time, if you decide it is time for a change.
Larkan believes that reviewing medical aid options is a relatively easy way for consumers to make possible savings in a tough economy.
“Asking yourself some simple questions about your needs might save you money in premiums which you ultimately may not need to pay, or ensure that your plan provides adequate cover, preventing extra costs eating into your income,” she concludes.
This post was based on a press release from wealth and financial advisory firm GTC.