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Healthcare funding is a top priority for many South Africans; medical expenses can be quite high and private medical funding through medical schemes are one of the best ways of looking after the healthcare needs of you and your family. Questioning the necessity of a medical scheme and what funds these schemes is something that many South Africans will do at some point. This article will address these two questions below.
The contributions from members fund a medical scheme. These monthly contributions or premiums are all pooled into funds according to different factors such as the age of the members and their risk profiles. These funds are managed in such a way as to ensure that they can properly sustain the medical scheme. They should be able to cover all admin/ business costs and satisfy member’s claims while still keeping the monthly premium as affordable as possible.
The way in which these funds are managed is closely monitored by the Registrar of Medical Schemes. A 25% solvency level has to be maintained at all times. If this is not done, the Registrar may review the situation and initiate certain changes to the benefits on offer and premiums or contributions requested of the members. It would be best to choose a medical aid scheme that has a reputation for being able to manage their funds well without the need for outside intervention.
More and more South Africans are beginning to question whether or not they truly need medical insurance. This is partly due to the fact that many people have suffered financially as a result of the recent economic recession and are looking to cut down on monthly expenses. Medical aid plans and schemes generally require a substantial monthly contribution. The truth is that not everyone needs a medical insurance plan. However, you only consider this route if you are confident that you will have enough cash available to be able to cover all medical expenses, include hospital bills, at any time.
If you are on a tight budget and looking to cut down on expenses then may find that cancelling your entire medical aid scheme may end up costing you a lot more money in the long run. Consider factors such as how often you use your medical aid benefits and what it would cost you if you cancelled the scheme and paid for these expenses privately. You may also consider downsizing to a less comprehensive scheme until you can afford the comprehensive on again. For example, if you are a young and healthy couple then you should consider a hospital plan.
Your individual financial situation and state of health will determine whether or not a medical aid scheme is the best choice for you. These schemes are funded by member’s contributions and they are managed in such a way as to ensure as much coverage and benefits to member as possible. You may find healthcare expenses to be a lot more affordable when you belong to a reputable medical scheme.