Hospi­tal plan for the young

Finweek English Edition - - Creating Wealth - Healthy 23-year-olds don’t need ex­pen­sive in­sur­ance cover

for a good hospi­tal plan for my very healthy 23-year-old daugh­ter and 25-year-old son is just un­der R800/month each. That’s the same per month as for my wife and me, with both of us al­ready hav­ing plenty of aches and pains. There’s some­thing rot­ten in the state of med­i­cal cover here so we started looking for al­ter­na­tives.

Let’s start at the top – and let’s not be shy about nam­ing them, since they’re the big­gest in South Africa. Dis­cov­ery Health of­fers two med­i­cal funds. Or per­haps we should call it a med­i­cal fund on two legs: the so-called hospi­tal plan and the med­i­cal sav­ings plan. The hospi­tal plan of­fers you pro­tec­tion against any planned and un­planned med­i­cal treat­ment re­quir­ing hos­pi­tal­i­sa­tion. In fact, it’s sim­ply an in­sur­ance pol­icy, more or less like your car in­sur­ance. Pay the pre­mium ev­ery month and if some­thing goes wrong, the in­surer will pay for fix­ing the dents in the car. If you’ve been lucky dur­ing the year and no one crashed into you, the in­sur­ance was a plain waste of money.

The hospi­tal leg of a med­i­cal fund is ex­actly the same. It’s an in­sur­ance pol­icy and can pay out a lot more than what your pre­mi­ums were if you need it. It’s a good thing. Don’t do without it.

The so-called med­i­cal sav­ings plan is com­pletely un­nec­es­sary and any per­son with a bit of self­dis­ci­pline and a few rand in the bank or a fa­cil­ity on his credit card shouldn’t need a med­i­cal sav­ings plan. Briefly and very sim­ply: ev­ery month you con­trib­ute R1 000 to a med­i­cal sav­ings plan and that en­ti­tles you to planned med­i­cal ex­penses to­talling R12 000 over the next 12 months. That’s for un­nec­es­sary vis­its to your doc­tor and tak­ing pills for colds, called flu. It also cov­ers the cost of hav­ing your teeth seen to from time to time.

Once you’re ex­hausted the funds in your med­i­cal sav­ings plan the amount re­im­bursed on your claims is much re­duced.

Leave that well alone. Get an or­di­nary credit card at a bank and call it your med­i­cal credit card. Put a red cross on it to re­mind your­self. Pay R1 000 into it ev­ery month, just as you would into a med­i­cal sav­ings plan. Ask the bank for a credit fa­cil­ity of R12 000 on the card and use it for your day-to-day med­i­cal ex­penses.

There are many ad­van­tages to hav­ing your own “med­i­cal credit card” rather than a sav­ings plan. Let me give you just two. You know im­me­di­ately that you’ve paid for your med­i­cal ex­penses your­self. That means the end of the usual waste­ful habit of “we’ve got a med­i­cal aid, so take the chil­dren to the doc­tor be­cause they’ve got a cough”. You’ll soon learn to buy some tablets from the chemist in­stead.

In fact, ev­ery phar­ma­cist worth his salt will al­ready have made up his spe­cial cold cure for the win­ter. That shouldn’t cost more than R50. If it does, go to an­other chemist. And if you have your own med­i­cal credit card, rather than a Dis­cov­ery sav­ings plan, it will also help your GP to use his own knowl­edge rather than that of a spe­cial­ist and three sets of blood tests to

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