Young and healthy? You still need medical cover

TONY SINGLETON reminds us that while older people face a higher risk of serious illness, young people are not immune.

MANY people are struggling with reduced income as a result of the pandemic, and when budgets are tight, it is easy to think that things like insurance and medical cover are not a necessity. Furthermore, South African GDP saw its biggest contraction in a century, highlighting the devastating effect of the virus. When it comes to medical aid cover and health insurance like gap cover, however, this thinking could not be further from the truth.

While illness and dread diseases such as cancer mainly affect those age 66 and above, they do occur in people of all ages, and Covid-19 is unpredictable, with more than 200 deaths in South Africa in 2020 occurring in people under the age of 40. Medical expense shortfalls could financially cripple young people who do not have savings built up, especially families just starting out.

DISEASE AFFECTS YOUNG AND OLD

While the majority of those who have been severely affected by Covid-19 have been older or have had existing comorbidities, the reality is that young and seemingly healthy people have also ended up in hospital and even in intensive care. Although Covid-19 is a prescribed minimum benefit (PMB) condition (a life-threatening condition that medical schemes must cover from your risk benefit), not all treatments are covered as such, which means that those affected could end up with related medical expense shortfalls.

Cancer is another disease that affects young and old, including children.

Treatments are typically extremely expensive, may not be covered as PMBs, and even if they are, could be subject to co-payments. The shortfalls from cancer treatments can be significant and will have to be covered by the patient or their family.

Pregnancy and childbirth are also areas that could lead to significant medical expense shortfalls, with complications, intensive care stays and even congenital defects are real possibilities. Illness and disease are stressful events, and worrying about finding the money to pay bills only adds to the strain.

LATE JOINER PENALTIES IMPOSED

Another important factor to consider is that both medical aid and gap cover providers impose waiting periods for cover, as well as late joiner penalties, which have been approved by the Council for Medical Schemes, for those who join after the age of 35. This penalty takes the form of a higher monthly rate for membership for joining at a later life stage, when you are more likely to need expensive treatments.

For medical schemes, this penalty is calculated using your age as well as the number of years you have not had medical cover since the age of 35 – between one and four years is an additional 5%, five to 14 years an additional 25%, 15 to 24 years an additional 50% and more than 25 years over age 35 is 75%.

Gap cover penalties are calculated differently depending on the provider, but members who join after age 65 will have higher premiums.

PROTECTING YOUR FINANCIAL FUTURE

When you or your loved ones are ill, the last thing anyone needs is to be choosing treatments based on what you can afford. Financial stress places a huge burden on anyone, and it can make you sicker and cause mental health issues. Planning for the future and covering what you can is the smartest move you can make. While many young people cannot afford comprehensive medical scheme cover, they also cannot afford the medical expense shortfalls that would result from serious illness or dread disease if they are on less comprehensive medical scheme options. Reducing your medical scheme cover and supplementing it with an affordable gap cover solution might be an option. However, it is always best to consult your financial adviser to ensure you have the best solution to protect your health and financial wellbeing today and in the future. Tony Singleton is the chief executive of Turnberry Risk Management Solutions.