Prioritise access to quality healthcare and protect yourself from financial stress. File photo.
By: Martin Rimmer
As we step into 2025, families are diligently re-evaluating household budgets, distinguishing the "must-haves" from the "nice-to-haves," and seeking smarter ways to manage essential expenses. One critical area under scrutiny is healthcare coverage, a universally acknowledged necessity, but at what cost, and benefit level should it be maintained?
2024 was economically challenging, and many households are still grappling with its aftermath. The most crucial aspect is to secure your healthcare funding needs, such as medical scheme and gap cover options, which will be fundamental to carrying you through a potential health crisis. The parlous state of public healthcare is well-documented, and hence why access to private healthcare by means of medical scheme membership and gap cover is a non-negotiable for many.
There are many ways of structuring your healthcare funding based on your unique circumstances, benefits usage, and budget, which is why the advice and guidance of a professional and independent healthcare broker will prove invaluable in unpacking all your options and weighing up the pros and cons of each in line with your specific risk appetite and potential budgetary constraints.
Essential steps for robust healthcare financial planning in 2025:
Engage a professional healthcare advisor: Before making any changes or decisions to your medical scheme benefits, it's crucial to thoroughly investigate and compare your options. A professional and independent healthcare advisor can help you navigate these choices, ensuring your decisions provide the most appropriate and affordable solutions. Remember, most schemes only allow movement between options (upgrades) at the start of a benefit year, but downgrades will be considered anytime in the year. Work with a professional who will devise a plan that suits your family's needs.
Review your healthcare spending: Analyse your current day-to-day healthcare expenses and claims history to determine if your existing benefits are adequate or if you faced significant out-of-pocket costs. An advisor can assist in gathering and interpreting this information to refine your healthcare financial strategy.
Assess your health status: If you're contemplating a downgrade in benefit options, it's crucial to consider any prevalent or potential chronic conditions. Ensure that necessary medications for you and your dependents are covered under the prescribed chronic conditions. For families with chronic medical needs, the potential savings on premiums must be weighed against possible additional out-of-pocket costs.
Get gap cover: With medical schemes often leaving substantial shortfalls, gap cover becomes essential. Gap cover is supplementary insurance to a medical scheme benefit that covers the difference that arises from the rate that healthcare specialists charge for in-hospital procedures versus what a medical scheme pays. In 2024, Sirago paid 20 ‘mega’ gap claims each exceeding R100,000, and in half of these cases, gap cover paid more than the medical schemes. For instance, one claim saw gap cover pay in a shortfall of R126,771 compared to the medical scheme's R27,573. This underscores the importance of gap cover in safeguarding against unexpected financial burdens.
Evaluate Self-Funding Capacity: If you opt for a hospital-only benefit plan, be prepared to self-fund primary care expenses like GP visits, dentistry, and optometry. Understand the implications of Prescribed Minimum Benefits (PMBs) and plan accordingly to manage non-PMB expenses.
Commit to Preventative Health Checks: Use your benefits wisely, by regular check-ups which can lead to early detection of illnesses, reducing the severity and cost of treatment while potentially saving lives. Make preventative health checks an annual priority to mitigate health crises early.
Adopt a Healthier Lifestyle: Even small, consistent lifestyle changes can significantly impact your overall health and healthcare costs. Reduce alcohol intake, eat healthier, quit smoking, and incorporate regular exercise into your routine. A simple 30-minute brisk walk daily will do wonders for your physical and mental well-being.
Striking the right balance
As consumers gravitate towards more affordable core hospital plans, adding gap insurance to cover potential in-hospital tariff shortfalls is absolutely crucial. A major health event can occur unpredictably, underscoring the necessity of comprehensive healthcare financial planning, even in tough economic times. Consulting an accredited advisor, especially when finances are tight, ensures your health needs are met without overwhelming financial stress.
* Rimmer is the CEO of Sirago Underwriting Managers.
PERSONAL FINANCE