South African consumers continue to face a range of financial challenges with a high inflation rate, constant petrol price increases, the recent repo rate increase and the high unemployment rate which was further exacerbated by the COVID-19 pandemic.
The financial advisor fraternity, on the other hand, is left with the task of helping cash-strapped consumers make the most of this volatile situation.
Financial pressures are affecting everyone and taking steps to cut down on monthly expenditure is a great way to free up more of your money for the things that matter. “One of the biggest mistakes consumers can make, however, is to cancel their medical aid altogether in the process of tightening their pockets.
Based on claims over the last two years, the average cost of hospitalisation and treatment for COVID-19 patients exceeds the R100 000 mark. This can easily run into the hundreds of thousands in hospital bills, which is where medical aid makes a major difference.
This doesn’t mean that members can’t take measures to cut down on the total cost of medical aid. Here’s a helpful guide to assist your clients to save money without compromising their future health and wellbeing.
Consider downgrading – not cancelling
Many South Africans have decided to change their plans to suit their pockets, opting out of comprehensive plans in favour of more cost-effective options available to them. These range from entry level plans for low to relatively high salary earners, to plans with ‘savings’ or out-of-hospital accounts that are provided for from a portion of your total medical aid contribution.
Hospital plans remain the most popular and attractive option for people whose day-to-day medical needs are fewer than those living with chronic illnesses and disease. A hospital plan offers full cover for planned and unplanned hospital stays, allowing members to manage any out-of-plan day-to-day medical needs.
Cancel unnecessary add-ons
While loyalty and rewards-based programmes offer some attractive benefits, like free or discounted gym memberships or cashback on fuel spend, many people don’t take full enough advantage of these programmes to justify the monthly cost of their memberships.
If one is not quite meeting those daily step or fitness goals to rack up those rewards points, cancelling the extra expenses that these programmes offer may be a prudent decision.
Mind the gap
We probably do not have to tell you this, but no matter how comprehensive the medical aid plan, it’s always a good idea to have gap cover to take care of the payment shortfalls. Gap cover can be a financial lifesaver, especially when it comes to footing the bill once the medical savings have run out (self-payment gaps) and minimising co-payments. If one has opted to downgrade their plan, gap cover is usually affordable and an essential to ensure members don’t end up with too many nasty surprises once the bill comes.