With the continued high escalation in medical costs, many individuals will find they cannot afford their medical aid costs once they retire.
A fair number of companies subsidise 50% of their contributions until retirement, at which point the member is required to pay their own way. We frequently receive calls from new retirees asking for a downgrade of option at the very time they ought to continue being a member of a high-level option.
Medical inflation (10.3%) has always been higher than the CPI index (6.2%).
As pensions erode due to inflation, the cost of healthcare could easily escalate to unaffordable levels.
Coupled with higher medical expenditure as one gets older, an increasing numbers of individuals who thought they were well off, will find their asset base severely depleted.
Coupled with higher medical expenditure as one gets older, an increasing numbers of individuals who thought they were well off, will find their asset base severely depleted.To illustrate this point for similar operations, the average length of stay in hospital for pensioners is likely to be 50% longer than for younger individuals in the 30 to 50 year range. There is only one way to address the situation. Pre-fund for health on a regular basis from a young age.
There are a number of pre-funding options for individuals of all ages. If you are an employer, check that your staff are aware of the situation.
Once again we emphasize the need to start all of your financial planning at an earlier age, it’s not ‘sales talk’ … it’s simply a reality!
The simple reality is that we are doomed to paying for what is already an unavoidable reality, in that people have zero faith in what government can provide, no matter how much taxpayers money is thrown at the problem.
The truth of the matter is that we literally cannot afford to land up in any public facility, the staff have a no care attitude, add to this a militant style of dealing with conflict and high absenteeism, who in their right mind would choose to go to any public hospital. So the alternative is that we are almost forced to be on a quality medical aid plan, because the alternative is not too enticing.
The best way to deal with the ever increasing costs is to review your plan options.
This can only be done once a year during October through to mid December – some medical providers will allow a down grade during the year – but just about all will not allow an upgrade.
Do not get caught or stuck with the notion that just because you have been with a medical aid company “XYZ” for a number of years, that you are obliged to stay with them for life… you may need to consider a “divorce”!
Various medical aid providers have found niche options that offer comprehensive benefits that may better suit you and your family.
But we cannot stress enough, this is a specialist field! It is recommended that you meet with a qualified, accredited medical aid advisor. Your investment broker is not the right person, it is important to meet with a medical aid specialist.
If you need assistance, submit your query under “SAVE ON” and we will have an advisor call to make a time to meet with you or your company.
NB! To dispel the myths that an advisor’s commission adds to the high cost of a medical aid plan – this is not the case. The maximum fee any advisor can earn from your medical plan is 3% of the premium, but is capped at a maximum of R65. The true cost of rising medical aid is not an advisor’s fees, but in fact general inflation.
Click the Medical Aid Plans link below and we will have a qualified medical aid advisor call you to discuss your current options or to assist you with setting up a new plan.
