How Does Retirement Affect Your Medical Aid?
If you are approaching 65 years and worried about how retirement will affect your medical aid, you need not be too concerned because medical aids are not like other financial products such as life insurance or hospital cash back plans. Your medical aid cover is not going to be reassessed, your monthly premiums will not increase and your cover will not fall away simply because you are now a senior citizen. However, there are other concerns about how retirement affects your medical aid if you are on a company medical aid or if you are looking for a medical aid for pensioners without previously having cover. Of course there is the money concerns in retirement and to some medical aid seems like an unnecessary frill but really speaking, it is an essential cover for older people.
Medical Aid Continues Once Retired
Any person of any age and health status can join a medical aid in South Africa but there are certain factors that can impact on immediate cover or price. If you join after the age of 35 years then you will pay a late joiner penalty which will be included in your monthly premium. This does not apply if you are switching from one medical scheme to another. If you join a medical aid with a pre-existing condition then it is excluded from cover for the first year of membership.
Therefore a person should do the utmost to keep their current medical aid, or switch over to cheaper cover if necessary, but not terminate membership at any point with the idea of joining later. It is therefore important for seniors to plan their retirement budget carefully to ensure that they can afford medical aid throughout their retirement. The cover continues only for as long as you keep paying the monthly contributions. Retirement may be a period where you live on a tight budget but the senior years are a time when one is in their poorest health in life.
Company medical aid after retirement
In most instances your membership to a company medical aid does not end with retirement. But this is no guarantee of your employer’s subsidy towards your monthly contribution. Remember that it is not mandatory for an employer to provide medical aid for a worker. Most employers do so in the form of a subsidy as an added benefit within a worker’s remuneration package. It is a perk on your salary rather than an essential fund that your employer has to contribute towards to as is the case with pension and unemployment insurance.
Therefore the employer’s contribution towards medical aid after retirement may fall away and it is important to clarify this point with an employer prior to retiring. However, may employers do continue subsidising medical aid premiums of their retired staff making cover more affordable for a senior who is no longer economically active. Company medical aids, even restricted medical aids, do not end your membership after retirement although they only cover members who work for the specific company, industry or part of a professional organisation.
Affording Medical Aid During Retirement
Whether you have a private pension fund or retirement annuity, the fact is that most seniors live on a tight budget once they retire. Medical aid takes away money that is needed for living costs but it should be considered an essential monthly expense. Take this into consideration – most diseases, especially chronic illnesses like diabetes and life-threatening conditions like cancer, are likely to arise or worsen after the age of 60 years. And even if it is not related to a disease, the age-related changes in your body also means that you need quality medical care.
However, quality medical care in South Africa usually means private healthcare. And private doctors, treatment in private hospitals and medication from private pharmacies is expensive. In fact it is quite unaffordable in South Africa without the help of medical aid. On the other hand, less than 10% of South Africans can truly afford to retire with sufficient money to attend to their needs. Medical aid may seem like a financial burden but without it, the years after retirement would be fraught with sitting in long lines at government clinics andlanguishing in overcrowded and poorly staffed government hospitals.