Discover essential tips for planning your healthcare in retirement, including insights from experts on medical aid coverage and financial planning. File photo.
By: Nicola Mawson
With age comes the curse of an older body that isn’t as agile as it once was and has more brittle bones. As a result, it’s important to ensure that you are fully covered for medical care the older you get, especially in retirement when you are likely to be living off a fixed income.
Lee Callakoppen, principal officer of Bonitas, explained that the medical aid’s data shows that members experience a 2% increase in health claims for each year that they age. “As people age, they are more likely to experience several conditions such as hearing loss, cataracts and refractive errors, back and neck pain, osteoarthritis, chronic obstructive pulmonary disease, diabetes, depression, and dementia,” says Callakoppen.
Emergency services, including emergency room visits and hospital admissions due to accidents or sudden illnesses, are also common claims, said Anthony Paterson, a financial planner at Paragon Wealth Advisors, which is a licensed franchise of Old Mutual. “Older adults are more susceptible to infectious diseases like pneumonia and influenza, leading to claims for hospitalisation and treatment,” he said.
Profmed CEO, Craig Comrie, added that each person has a risk profile as they age, and many older people are susceptible to several different conditions mostly relating to their chronic illnesses. “There are older people who live healthy and full lives but it’s always important to do age-appropriate screening and consult a doctor if you pick up emerging risk. The most common issues for older people are cataracts, hip and knee replacements, and also the increasing prevalence of cancer,” he said.
Comrie said every individual should understand what level of cover they need based on ageing and family history as well as even their current health status. “Allowing cover for unforeseen events is also advised,” he said.
Thomas Bokaba, benefits manager at AfroCentric, said that ensuring you can afford quality medical aid in retirement requires “astute financial planning and should be part of your financial planning, which is normally done with a financial advisor who will give you advice around how you invest for your retirement”.
Paterson said it's vital to start planning for medical aid costs well before retirement. This includes estimating future medical expenses and setting aside funds specifically for this purpose as well as selecting the correct level of cover.
Callakoppen cautioned that, even though it can sometimes be tempting to cut down the level of cover to save costs, this relief in costs can be short-lived when unexpected medical events occur.
“Downgrading may lead to a medical aid plan with more exclusions, which is why it’s important to know what if any, procedures or services are and aren’t covered. This is particularly important as you get older. For example, knee and hip replacements become more likely as you age. An MRI on your knee can cost around R15 000 and costs can increase rapidly when you factor in treatment, medicines, and procedures if you don’t have any healthcare cover,” explained Callakoppen.
However, Bokaba said this doesn’t mean that everyone will automatically need a higher level of medical aid when they retire. He noted that it is important to ensure that a financial advisor provides input taking into consideration their personal healthcare needs. “I know many octogenarians who are extremely fit, and only have hospital plans as they do not have any chronic conditions and therefore do not need anything more than a hospital plan, he said.
Bokaba noted that people can increase their health cover if their circumstances change.
Typically, exclusions by a medical scheme are applied to members who have not taken out medical scheme cover timeously and join when they need care,” said Bokaba. He explained that most retirees are already members of a medical scheme, so, even if they change options or schemes, there is limited underwriting that can be applied with a voluntary move, which is generally a three-month waiting period if there has been a gap in cover of more than three months.
Yet, if someone has gone without cover for two years or more, they could attract a 12-month condition-specific waiting period, said Bokaba. “This would only be applied if a member is moving from one medical scheme to another. A medical scheme cannot impose a waiting period on a person who is changing options,” he said.
Paterson advocated a gap cover policy as, by understanding medical aid exclusions, retirees can make informed decisions and choose gap cover policies that best suit their needs.
Bokaba added that, if the retiree is part of an employer group or linked to an employer group that changes medical schemes, then the conditions of membership for the active members will also be extended to the retirees who are linked to the employer group. “Normally, your healthcare consultant would negotiate and ensure that waiting periods are not imposed on a group move, and this would include any retiree linked to the employer group,” he noted.
Comrie said people should always know what the scheme will cover and where they are accepting responsibility to fund expenses that are not covered.
“The bottom line is that we cannot compromise on our health. The cost of private healthcare can be financially crippling, especially in the case of a severe illness or surgery. Medical aids allow access to quality healthcare when needed, which is vital in cases of an emergency,” said Callakoppen.
PERSONAL FINANCE