Should we belong to one MEDICAL SCHEME?
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