Imagine for a moment that your health isn’t the best. Now imagine you’re in a financial bind and need to cut costs. You’ve cancelled your life insurance, downgraded your home insurance, and all that’s left is your medical aid. Should you cancel your medical aid? Here is why that isn’t such a great idea:
Frank resigned from his job halfway through 2017. It wasn’t that he didn’t want to work, he just had more than his fair share of health challenges during the year. He reckoned he’d be back at work by latest January 2018. January came and went, and he still couldn’t find work. Crunch time had arrived, and with finances at an all-time low, Frank missed his February debit order for his medical aid.
In actual fact, Frank missed 2 medical aid contributions in a row & his membership was cancelled.
Fast forward four months and Frank was back in a position to continue paying his medical aid contributions because he had managed to find a new job.
- First surprise was that he had to fill in a whole new application form even though less that 4 months ago he had belonged to the very same medical aid scheme.
- His second surprise came when their offer came back…
Not only had they applied a 3 month general waiting period; they also applied a 12 month condition specific waiting period to his heart condition. Even worse, this was also to apply to the prescribed minimum benefits (PMBs) If you haven’t read our blog post on PMBs make sure you do that here.
Basically, this meant two things:
- that the medical aid wouldn’t pay a cent for any treatment needed during the first 3 months for any condition. During this time – and during the 12 months – it was still expected of Frank to pay his monthly contributions.
- That his heart condition would not be covered during the first 12 months.
Frank now had two choices if something serious were to happen:
- Pay his own way, or…
- Use a state hospital
To Frank it sounded like a death sentence.
Was it legal for the medical scheme to apply these waiting periods?
There are 3 scenarios when a medical scheme can apply waiting periods.
You have not been a beneficiary (This means either as a main member or as a dependent) of a scheme, for more than 90 days, before applying at a scheme.
The scheme may apply:
- A 3-month general waiting period, and
- A 12-month condition specific waiting period
This applies to the prescribed minimum benefits as well. Frank fell into this category.
You have been a beneficiary of a scheme during the past 90 days before applying at this scheme, but have not been a beneficiary of one or more schemes for a continuous period of up to 24 months.
The scheme may apply:
- A 12-month condition specific waiting period which won’t apply to the prescribed minimum benefits
- The balance of any general or condition specific waiting period applied by the previous scheme
You have been a beneficiary of a scheme during the past 90 days. You’ve also been the beneficiary of one or more schemes for the past 24 months.
The scheme may apply:
- A 3 month general waiting period which doesn’t apply to the prescribed minimum benefits.
As you can see, the medical scheme was well within their right to apply the waiting periods.
Are waiting periods fair?
Emotionally no, but mathematically yes. Let’s explain.
A guy like Frank had no choice. It’s not as if Frank was trying to save himself some money by not belonging to a medical scheme. But what’s a person supposed to do when you lose your job and your income?
That’s the emotional side.
Then there’s the mathematical side…
Think of a lifeboat. One lifeboat can take 20 people. If 25 people jump on board, the lifeboat will sink.
The same applies to a medical scheme. Medical schemes run a fine line between balancing expenditure and income. Too many expenses and too little income is the fastest way to sink a scheme.
So, imagine if everyone waits till they really need a medical aid, before joining one. They’re just a drain on the resources of everyone who faithfully pays their premiums year after year.
If you’re seriously ill, don’t ever cancel your medical aid UNLESS you have no other option.
First ask yourself:
- Can I downgrade to the cheapest plan possible?
Some medical schemes offer plans based on your income. Someone with a higher income would pay close to R2 000 a month for something that someone, with no income, would pay R800 a month for.
- Can I remove dependents from my plan?
It’s not ideal, but it is one way to reduce your cost.
- Can someone pay your monthly premium?
Yes, your medical aid contribution can be paid by anyone.
- Can I go onto someone’s medical aid, as an adult dependent?
Difficult to do unless you’re financially dependent upon them.
But don’t rely on your previous medical scheme to just reinstate your medical scheme, six months after it lapses.
There’s a better chance of them applying the waiting periods even though you’ve been with them for 10 years or more.
Until next time.
The Wise About Life team