Should we be­long to one MED­I­CAL SCHEME?

CityPress - - Business -

Itume­leng writes:

My wife and I are re­tired gov­ern­ment em­ploy­ees; she be­longs to Gems med­i­cal aid scheme and I be­long to Boni­tas. We both re­ceive a med­i­cal sub­sidy, but when we re­tired we did not con­sol­i­date into one med­i­cal scheme. Could this lower our costs?

City Press replies:

There are two key con­sid­er­a­tions: Will com­bin­ing mem­ber­ship pro­vide you with the same ben­e­fits you cur­rently have and how would it af­fect the sub­sidy?

Ac­cord­ing to independent fi­nan­cial ad­viser Dun­can Parker of Ser­ala Fi­nan­cial Ser­vices, if you are com­par­ing two iden­ti­cal schemes, then the pre­mium of a prin­ci­ple mem­ber plus a spouse would be lower than two prin­ci­ple mem­bers. How­ever, this lower com­bined pre­mium re­sults in a lower sav­ings por­tion for the cou­ple. In other words, if you were both prin­ci­ple mem­bers you would pay more per month, but you would in­di­vid­u­ally each have a higher level of sav­ings than a prin­ci­ple mem­ber and spouse.

If one spouse is rel­a­tively healthy and the other has a higher level of claims, then the ben­e­fit of com­bin­ing on to one mem­ber­ship is that the com­bined sav­ings can be used by the less healthy spouse who, as a sin­gle mem­ber, would have been lim­ited to just his or her sav­ings pool. The draw­back is that if one spouse does use all the ben­e­fits up then the other spouse ends up hav­ing to pay for their med­i­cal costs (out-of-hospi­tal) out of their pocket be­cause their com­bined sav­ings is de­pleted. You also need to keep in mind that a wait­ing pe­riod may ap­ply when trans­fer­ring a spouse to a new fund.

There are lim­its on the sub­sidy of­fered by gov­ern­ment and, if they com­bined their pre­mium into one mem­ber­ship, this could neg­a­tively af­fect their sub­sidy. The sub­sidy for re­tirees who are on Gems is a max­i­mum of R2 017 and re­tired mem­bers are re­spon­si­ble for full con­tri­bu­tions of ad­di­tional de­pen­dents if the con­tri­bu­tion ex­ceeds R2 017. The cou­ple would need to es­tab­lish whether the hus­band would lose his sub­sidy if he moved to Gems as a de­pen­dant.

For this rea­son, it is im­por­tant for the cou­ple to seek ad­vice. They also need to con­sider the ben­e­fits of each scheme – if they are sav­ing on premiums but get­ting less cover, that would not nec­es­sar­ily be a good strat­egy. Does one scheme of­fer bet­ter in-hospi­tal rates than another? Does one scheme of­fer bet­ter ad­min­is­tra­tion? Parker says they also need to re­mem­ber that all med­i­cal aids only pay for in-hospi­tal costs at their rates. So, us­ing spe­cial­ist and hospi­tal net­works re­quired by the plan would be im­per­a­tive to lim­ited out-of-pocket costs af­ter a hospi­tal stay.

Trans­fer costs are based on the pur­chase price of the prop­erty

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