Medical cover: the high cost of waiting too long to join

Waiting too long to join a medical scheme could cost people dearly later in life, when late joiner penalties can significantly increase their monthly medical aid contributions.

This is the warning from Michael Emery, Marketing Executive at Ambledown Financial Services, who says South Africans should ideally join a medical scheme as soon as they start working and before they reach the age of 35.

Emery notes that many young South Africans opt not to join a medical scheme because they are currently in good health, or because they cannot afford medical scheme membership. However, neglecting to do so can prove costly as they become older and at greater risk of illness. “Starting early is an investment in the future of your health, and as important as retirement savings,” he says.

“Everyone should have access to quality health care, so as soon as they can afford it, they should be investing in cover that offers primary care, diagnostics and hospital treatment. If they wait too long to join a medical scheme, their contributions will be significantly higher because they present a greater risk to the scheme.”

Emery says medical scheme late joiner fees and waiting periods are designed to prevent misuse of the medical scheme system, and protect medical scheme members who have been within the system for many years.

Protecting existing members
“Late joiner fees and waiting periods could be seen as discriminatory in some way, but they're not,” he notes. “They're there to protect the people who've been contributing to the healthcare fund for a number of years, from those who may try to exit and enter the healthcare system as and when they need to. If people join a medical scheme only once they know they will need medical treatment, it presents a greater risk to the scheme and pushes the premiums up artificially.”

Late joiners who have had no cover for many years are also at greater risk of having health issues that were not diagnosed or properly managed for years, he adds.

“Medical schemes calculate late joiner penalties based on the individual’s age at the time of joining the scheme, and the number of years they have not been a medical scheme member,” he explains. “The penalty is generally a percentage of the base contribution rate, and could add as much as 75% to the monthly medical aid contribution.”

Emery concedes that the high cost of medical scheme contributions can deter many South Africans from investing in their health.

However, he notes that numerous entry-level medical schemes and medical insurance products are available in the market.

“These products may not cover the full cost of certain treatments, but they can be augmented by gap cover, which is an insurance product to cover shortfalls in medical scheme cover,” he says.

Filling the gaps
Gap cover is designed to help clients pay for hospital treatment where medical charges exceed what medical schemes will pay for. Gap cover is not the same as medical scheme cover, and is only available for members of medical schemes.

Emery notes that medical inflation is driving up the cost of healthcare beyond the limits of what medical schemes will cover. In some cases, medical practitioners charge as much as 400% the medical scheme rate or more. Gap cover helps clients pay for essential in-hospital and defined out-patient medical treatment that might otherwise cause serious financial hardship for them and their families.

"Medical bills shouldn’t stand between you and quality care. Having gap cover can ensure that you get the treatment you need – whether it’s cancer care, hospital procedures, or outpatient treatments – without the financial stress," concludes Emery.

Gap cover is not a medical scheme, and the cover is not the same as that of a medical scheme. Gap Cover is not a substitute for medical scheme membership.

Ambledown Financial Services is an authorised Financial Services Provider No.10287.