By Dominique Bowen
As the year winds down, it's the opportune time to reflect on the health needs of you and your loved ones, and what these mean for your wallet. During November and December, medical scheme members should take note of any changes in their healthcare needs that would require more cover in the new year, with medical schemes’ upgrade window falling over these two months.
Unsure whether you should stick to your current cover, or give it a boost to avoid any nasty surprise bills in 2022? The experts are here to make that decision easier for you with these key considerations:
Your health status has changed
“If you’ve been diagnosed with a medical condition and you are going to need extensive treatment next year, an upgrade in plan will help mitigate those costs,” says Terence Tobin, independent financial planner, money coach and owner of Rich Ideas Group. Look at your current plan benefits, and if you’re unsure, speak to an expert about whether your existing cover will suffice depending on the nuances of your treatment or management of the condition.
Particularly applicable is where the treatment needed for a condition you or one of your dependants has been diagnosed with isn’t listed as a prescribed minimum benefit (PMB), notes Deon Kotze, head of Research & Development at Discovery Health, which accepts option-change requests from its members until December 31. The Council for Medical Schemes defines the PMBs as a set of defined benefits that ensure all medical scheme members have access to certain minimum health services, regardless of the benefit option they have selected.
Your family is growing
If you got married in the past year, it’s worth sitting down with your partner to review both of your medical needs, and to discuss these with a qualified financial planner to see whether an option upgrade would benefit you. “A life-changing event like this brings an additional person onto your option, and your new spouse may have a different health status to you,” notes Damian McHugh, executive at Momentum Health Solutions, whose members have until November 19 to make their option changes for 2022.
Equally important is whether you plan to add to your family with the arrival of a baby in the coming year – or perhaps, if you’ve already welcomed a new addition, assessing your child’s health needs and comparing them to the benefits of your current plan. “Members may require higher levels of cover for discretionary day-to-day healthcare services,” says Kotze.
There was too much year at the end of your 2021 medical savings
You might have arrived in 2021 thinking the lump sum in your plan’s medical savings account (MSA) would carry you though the year’s day-to-day expenses – medication and the odd doctor’s appointment – but by the middle of the year you had run out. McHugh suggests this is another important consideration when forecasting your needs for 2022. “If your annual records indicate that you ran out of funds in your MSA, this can warrant a plan upgrade, or prompt you to investigate alternative ways in which to save for these additional healthcare expenses,” he says.
Discuss this with a financial planner before locking in any changes. Here, Tobin considers an alternative way to prepare for the odd non-claimable expense: “The advantage of having built-in medical savings is that you are advanced this money at the beginning of the year. If you decide to save on your own, it will take longer to build up that kitty, but then you’ll have the cash at hand and be in a position to negotiate with medical providers for better rates. The question is: are you diligent and able to save this up over time, knowing that you might suffer an incredible medical expense while you’re saving up this pot?”
Your employer contributes
An upgrade may also occur when medical scheme members gain access to an employer subsidy for a more comprehensive medical scheme option, says Kotze. If you work for an employer, ask your HR representative about your employee benefits and whether this applies to you; you could be eligible for a saving, with access to more benefits when you need them.
On that note, something like a relocation for work can be reason to look at other plan options. Entry-level cover may only offer benefits at a select group of medical providers, while a more comprehensive plan will provide cover at more facilities.
Lessening the pinch
We all want peace of mind knowing that our medical needs will be taken care of without it setting us back financially for months or years to come, and there is a premium attached to this comfort the more comprehensive it gets. With annual increases, it’s easy to feel dissuaded from upgrading your plan, but are you considering the long-term implication of doing so?
“Increasing contributions is a fair and valid concern; however, many of the medical schemes have deferred increases, and kept increases at a rather sustainable level for the year ahead,” says Tobin. “What members need to consider is the few-hundred-rand increase per month that they potentially could pay versus the few-hundred-thousands of rand of a bill that may come their way. It’s always going to be a risk mitigation process one needs to follow.”
For more information about health care and medical cover, read the November 2021 issue of our free digital magazine IOL MONEY.