These days, it seems like all of us are talking about the high cost of living, and comparing notes on ways to save our hard-earned money. I have personally been dealing with many clients who want to cut down on their medical aid costs, and come to me for advice. Unfortunately, the advice I can give my clients is often not what they want to hear – to downgrade your medical aid to pay less on your monthly contribution means that you will be sacrificing benefits you had on a higher plan.
In some cases, downgrading is the right choice, but you need to research the options you are looking at carefully, before making a decision. Your financial advisor is the best person to explain the difference in benefits if you are looking at ways to save money. For example, a single person who is young and healthy, can easily downgrade to a plan that covers hospitalisation only – and cover the occasional doctor’s visit or dental check-up out of their own pocket.
But a family with small children who visit healthcare providers on a regular basis, or someone with chronic conditions, need to be on a more comprehensive plan if they don’t want to end up in a situation where their health suffers because they cannot afford to pay for a doctor’s visit out of their pocket. The decision to try to save money on a medical aid should not be taken lightly – it could end up being the biggest mistake you make as you may be compromising you or your family’s health.
A good idea when considering downgrading is to request a claims history for at least the past three years from your medical scheme – you can then have a look at where you spent the most, and also have an idea of whether these expenses happened only occasionally, or whether it is a regular expense.
Then ask your financial advisor to take your claims history into consideration when doing a Needs Analysis for you. In conjunction with your advisor, you can then look at different options and decide whether cost-cutting on your medical aid expenses would be viable for you, or would pose too much of a risk in the long run.