Future proofing your Healthcare
in-network hospitals and doctors for procedures and treatment or a scheme with co-payments, topped up with adequate gap cover.
Retirement health
While some save and prepare for retirement their entire working lives, the reality is that many are not financially prepared for the spiralling cost of medical expenses in retirement. This underlines how important it is that whether early in a working career, nearing retirement or having transitioned out of the workforce, it is vital to understand and plan for growing medical costs as older bodies start to need greater medical care.
Not only are there the costs that will accrue over retirement, there may also be the costs of longterm, nursing home care.
“When we hit 60-plus, there is usually a spike in expenses as we become more prone to chronic conditions,” says Naidoo. “The more chronicity, the more medical interventions are required. This means it is essential to have good cover and to get this sooner rather than later. The reality is that we are an aging nation. At Medishield, 13% of our members are pensioners.
“The general feeling is that the older you get, the more benefits you need to have, and this means looking at the bonus or premium options that are out there.”
The amount of retirement income to budget on healthcare depends on overall health and age — as it does in the pre-60 demographic. The Catch-22 is that the healthier the person going into retirement will often allocate less to healthcare expenses, even though ophthalmology and dental care, for example, become increasingly necessary. With a healthier lifestyle comes greater longevity and a longer retirement.
One way to consider the concerns of retirement cover is to investigate and consider a medical savings account, although this may be a component of a medical aid plan. Despite the naysayers about the state of South Africa, this country has been ahead of the curve for many years in terms of its financial services offerings, thus medical savings plans in South Africa are quite innovative and their
design has continually improved.
Available to members of all eligible ages is an option from Medshield, its Medisaver. Designed around independent individuals who want to manage their own healthcare expenses, Medisaver offers unlimited in-hospital cover through the Compact hospital network, while members manage their own out-of-hospital medical requirements through a personal savings account. As an added benefit, the Medisaver option offers an out-ofhospital maternity package.
Generally a medical savings account is a percentage of the insured’s contributions that are in a separate account, from which certain benefits can be paid. Just bear in mind that members cannot withdraw from a medical savings account in cash unless they have a credit balance and wish to terminate their membership. Any money not used at the end of a year is carried over into the next and should accumulate interest.
Those in their autumn years need to consider that a crisis at this time requiring home, hospice or a frail care facility could leave them dependent on a spouse or family members who may be unable financially to support them. This care can cost significantly more than retirement savings can allow for.
There is long-term care insurance available, which can mitigate the effects of a life crisis, but the conditions vary from insurer to insurer. Benefits can be paid to the insured or the long-term care provider. The younger the person is who signs up for a long-term care insurance policy, the more aggressively priced the premiums should be.
While the policies will differ in terms of the requirements and what will be covered, at the top of the list in terms of the beauty of this type of insurance is that it can help afford the insured the preservation of lifestyle and dignity.
The advice for those in the 60-plus category is to ensure that their financial planning around their healthcare remains structured and holistic within the financial resources they have available. The primary breadwinner should be absolutely transparent with their families about what the future may hold and have the right conversations, preferably before they retire.
Retirement is not a go-it-alone situation and should leverage from a lifetime of relationshipbuilding with financial advisors and insurers, constantly evaluating the retirement planning that has been put in place.
Looking to the future, Naidoo says Covid-19 has changed the world, including in healthcare. “This new virtual world is extremely exciting for the industry. We are turning to technology power to democratise and healthcare will become more affordable, accessible and able to improve the quality of care. A healthier citizenry will truly benefit the entire country,” he concludes.