Insured...Or Unsure?
Amongst the many debit orders that send us into bankruptcy on a monthly basis, is medical aid (or health insurance). The amount each of us pays depends on who we can afford to give all our hard-earned money to on a golden platter 12 times a year, ranging from the bottom of the bottom, all the way up to the champions of the health chain. However, the question I pose in this article – is it really necessary? “it” referring not to the hospital plans, but the “savings” concept.
I will acknowledge that it is vital to at least have a hospital plan, if you can afford it. One can never predict (Unless you are John Edward) when you might just get attacked by an angry ostrich, or fall out of a bus and break your face. There are many options for hospital plans with different medical aids, for as little as a few hundred rand per month.
My problem arises with the idea of a “savings” option with a medical aid plan. It does not make any sense to me. Most people (unless you have severe hypochondria) only see a doctor a few times a year, perhaps 4-5 times max, (Everyone gets the occasional flu or stomach explosion), and most GP’s charge between R300 – R400 per visit. So why not just pay for this as it comes and save a ton of money in the long run?
So let’s create a hypothetical situation, using Miss Sandton Sally. Let’s say Sandton Sally pays R900 for medical aid every month, with SuperDuperMagicMed (R10800 for the whole year of 2012). Sandton Sally visited her GP, Dr. Sandton Sam, 3 times in 2012. Once at the beginning of the year for a stomach bug, once in May for having been bitten by an angry ostrich (Nothing serious though) and once toward the end of the year, upon returning from Australia with a minor spider bite. For each appointment she was charged R330 (R990 so far) which SuperDuperMagicMed covered. Also, each time she was prescribed a basic medication, which cost R100 each time - so a total of R300 for the year (R1290 so far)
Sandton Sally also paid a visit to her gynecologist in August. This cost R800 for SuperDuperMagicMed. Nothing was wrong, as she had been a good girl, so no extra moola had to be paid for unexpected complications. (So R1290 + R800 = R2090 so far)
Sandton Sally spends a lot of time in the sun, baking herself like a human pizza, so she visits her dermatologist annually, which costs R750 (R2090 +750 = R2840)
Sandton Sally likes to look after her teeth, so she visits the dentist once a year (Even though she should go every 6 months – naughty Sandton Sally), which cost R600. (R2840 + 600 = R3440)
And so we conclude the health adventures of Miss Sandton Sally. It is now 2013, and SuperDuperMagicMed paid R3440 for her appointments. How kind of them, right? Wrong. Sandton Sally paid a total of R10800 for her medical aid in 2012. They only ended up paying R3440 for a whole year’s worth of medical meetings. So – why have medical aid savings if you are going to end up losing so much money? In this case, Sandton Sally lost R7360. For nothing. To support a useless money-making-scheme.
If Sandton Sally had purely been paying for a hospital plan (to cover her backside for ostrich-related emergencies) then she could have easily just transferred that extra money she wasn’t paying for medical aid every month into a private savings account of her own, and used that to fork out for any appointment necessary throughout the year. She would not have lost R7660. I would rather fork out a big amount in one go, for instance R700 for a dermatologist, as opposed to steady premiums every month that result in massive money loss (knowing that I am actually saving money in the long run) The only people that would make use of these savings are the hypochondriacs who would take advantage of every (and any) appointment they can have with every (and any) type of practitioner.
I am currently in “decision-making-mode”. I am debating switching to just a hospital plan, and putting the extra money, that I am not throwing away to my medical aid savings every month, into my own private savings account.
What does everyone reading this rant think? What is your opinion? Think about my suggestions – maybe you could end up saving a lot of money, and finally buy that ostrich-riding-protective-helmet you have been trying to save up for.
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