To Downgrade or not to Downgrade Your Medical Aid

These days, it seems like all of us are talking about the high cost of living, and comparing notes on ways to save our hard-earned money.  I have personally been dealing with many clients who want to cut down on their medical aid costs, and come to me for advice. Unfortunately, the advice I can give my clients is often not what they want to hear – to downgrade your medical aid to pay less on your monthly contribution means that you will be sacrificing benefits you had on a higher plan.

In some cases, downgrading is the right choice, but you need to research the options you are looking at carefully, before making a decision. Your financial advisor is the best person to explain the difference in benefits if you are looking at ways to save money.  For example, a single person who is young and healthy, can easily downgrade to a plan that covers hospitalisation only – and cover the occasional doctor’s visit or dental check-up out of their own pocket.

But a family with small children who visit healthcare providers on a regular basis, or someone with chronic conditions, need to be on a more comprehensive plan if they don’t want to end up in a situation where their health suffers because they cannot afford to pay for a doctor’s visit out of their pocket.  The decision to try to save money on a medical aid should not be taken lightly – it could end up being the biggest mistake you make as you may be compromising you or your family’s health.

A good idea when considering downgrading is to request a claims history for at least the past three years from your medical scheme – you can then have a look at where you spent the most, and also have an idea of whether these expenses happened only occasionally, or whether it is a regular expense.

Then ask your financial advisor to take your claims history into consideration when doing a Needs Analysis for you.  In conjunction with your advisor, you can then look at different options and decide whether cost-cutting on your medical aid expenses would be viable for you, or would pose too much of a risk in the long run.

This article was adapted for Smart Money and was taken from: https://money101.co.za/downgrade-downgrade-medical-aid/