OPINION: Join a medical scheme while you’re still young
Joining a medical scheme when you’re young is probably the last thing on your to-do list. You’re young and healthy, so why do you need medical cover, right? Well, the answer is simple. Your future self will thank you in the years to come.
Your health’s rainy day fund
While you are young and healthy now, there’s always the chance that you could develop a medical condition or require an expensive medical procedure sometime in the future. Think of it like this: joining a medical scheme early on in your life is your health’s rainy day fund.
With our current lifestyles, people are developing serious illnesses earlier and earlier in their lives. This could be due to many factors, from genetics to stressful environments. Investing in your health from early on in your life is the best thing you can do.
When you start contributing to medical scheme from a young age, you don’t only help your chosen medical scheme to stay financially healthy, but in return they could help you be your healthiest self when you need it most, by tracking your health over the long-term and making sure you are covered.
Where does your money go?
According to the Medical Schemes Act, all medical schemes have a fiduciary responsibility to look after the reserves or remaining money to cover future claims - this means that your chosen scheme should always have enough money in reserve to look after its members and meet the Council for Medical Schemes’ solvency ratio of 25%.
Remember that your medical scheme is owned by you and other members who may require treatment, whether they are visiting a GP, or need to undergo chemotherapy. Essentially, your scheme contributions go towards a pool of money (that rainy day fund) to provide care to members who need it most at a specific moment in time.
And one day when you may need it, that fund will care for you too, thanks to your long-term Membership as well as other members’ contributions.
Sharing is caring
When applying to join a medical scheme, it is important to be honest with your advisor and complete the questionnaire truthfully. Even if you feel like you’re oversharing, it is better to be open and honest about your health in your application, especially when it comes to pre-existing conditions (like diabetes and asthma) or previous procedures (operations or hospital visits).
Think about it this way: Joe applies to join a medical scheme. He’s had a knee operation a year ago, but decides not to disclose it on his application. Immediately after joining, Joe starts claiming for physio visits. Joe thus had a negative impact on the financial wellness of this medical scheme and on other members of the scheme. If he had disclosed his procedure while applying, he may have had a compulsory waiting period applied, and may have had to fund some physio visits out of pocket, but after his waiting period, he would have had full cover like all other members.
Why the wait?
To protect the scheme from the Joe’s of the world and maintain its fiscal ability to provide care to its members, there’s usually a waiting period applied before your membership becomes fully active. This is typically 90 days (three months), or up to 12 months if you have a pre-existing condition based on the Medical Schemes Act. While this may seem like a strict measure, once that waiting period is over, you will be 100% covered, even for your pre-existing conditions. Not that bad.
Underwriting and late joiner penalties
Underwriting is when you are penalised for joining a medical scheme later in life. If you join a medical scheme when you’re still young, your chances of underwriting are lower. Depending on your age, you could pay up to 75% more per month (for the rest of your life) if you join a medical scheme when you’re older.
For example, if you only decide to join a medical scheme when you’re 35, the scheme you’re joining will penalise you based on all the years you haven’t been covered in addition to the risk of having a pre-existing condition and not knowing about it.
Taking care of yourself, now and in the future
Being a member of a medical scheme not only gives you the peace of mind knowing your day-to-day healthcare needs are covered, but also that if you do become seriously ill, or require a big medical procedure, they’ve got your back because you’ve helped them stay healthy too.
Craig Comrie is the CE and Principal Officer at Profmed.