Many young people struggle to justify whether they really need health insurance cover, when being caught between the rock and the hard place of earning their first, albeit limited income as a young adult, and having to take responsibility for their own healthcare financial planning.
In a country like South Africa where public healthcare is notoriously poor and inefficient, having access to quality private healthcare is that one life essential that should never be left to chance and should be at the top of your priority list in terms of budgeting.
“For many, getting their healthcare financial planning in order from the outset of their independent life is often left too late, as something that ‘I need to get to when I can afford it’. Many young people may assume that they are healthy and can ride on the fact that ‘they never visit a doctor” and are unlikely to face a serious illness. But it’s a flawed approach since a health crisis does not necessarily come knocking as a serious illness – it can be anything from a serious sporting injury, a car accident, a freak injury, and unfortunately for some, a serious bolt-out-the-blue illness like cancer. The reality is that all of these events are entirely possible and are always unexpected, hence why even as a young and seemingly healthy person, you need a healthcare plan that will get you quality private healthcare in an unexpected health crisis, with your finances intact,’ explains Martin Rimmer, Chief Executive Officer of Sirago Underwriting Managers, a Gap insurance provider underwritten by GENRIC Insurance Company Limited.
Knowing where to start, and what is best for your personal and financial circumstances can be tremendously tricky. The most important thing to remember is that you are never too young, and no budget is too small to get professional and qualified advice to help you devise a fit-for-purpose healthcare financial plan that’s perfect for your needs,” adds Martin.
Key considerations when starting out on your healthcare financial planning journey
Below are 3 key considerations a young person starting out on their healthcare financial planning journey should consider:
- This is not the time for a D-I-Y approach: In a sea of complexity and jargon, one of our trusted financial advisors will be invaluable in assessing all your options, what’s absolutely vital and optional, highlighting any pitfalls to be aware of, and navigating the best way forward for you. In fact, the experience and advice of a broker will ensure that you don’t pay for cover you may not need, and more importantly, that your most important risks are properly covered, and you’re not left wanting in the middle of a health crisis. Remember, that your relationship with your broker does not start and end at inception of your cover – your broker is there to provide you with ongoing advice and support throughout your changing life stages and financial planning needs.
- Get the best cover you can for the unexpected: Consider a good ‘hospital cover only’ medical scheme benefit. It’s more affordable than comprehensive benefits and covers you for any in-hospital care you would need as a result of a sudden injury or illness. The proviso is to ensure that the network hospitals stipulated by the medical scheme are accessible. You also want to be sure that there are decent oncology benefits should you ever face a crisis like cancer – the likes of breast cancer, melanoma, lymphoma, and certain leukaemia increasingly occur in younger people, and even if there is no history in your family, you should have a safety net should the worst occur. Remember though that a hospital medical scheme benefit option pays for in-hospital events only, so you will need to self-fund any primary care costs, such as day-to-day GP visits, dentistry, and optometry for example. Apply the discipline to make provision for when you may need to self-fund these medical needs.
- Get Gap cover: Most medical schemes have deductibles and co-payments and many members are left out of pocket when hospitalised due to shortfalls on what specialist doctors charge which is usually significantly higher than the rate that medical schemes reimburse – this can be especially marked on lower benefit options such as ‘hospital cover only’ benefits. Sirago’s average “large loss” gap claim now sits at around a R40-60K shortfall. When you consider the potential financial impact of a shortfall on your medical scheme benefits, and that a Gap cover premium is around R220 per month for a single person and that you are covered up to a maximum of R174K per annum, it’s clear that Gap Cover is an essential part of your affordable healthcare strategy.
It’s human nature to hope for the best but relying on hope to protect you in the face of a health crisis is risky. The reality is that with a sound healthcare financial plan in place, you’re free to enjoy a lot more knowing that if anything should go wrong, your bases are covered when it comes to any health crisis life may throw at you by having access to the best possible quality, private healthcare.
Extracts of this post was written by Sirago Underwriting Managers (Pty) Ltd. Read the original article here