It is accepted part of life that as we need more medical care as we get older. Pensioners and retired senior citizens are understandably concerned – both age and their income are obstacles to ensuring health and affording medical care. Fortunately South Africa has a world class private healthcare sector but it can be expensive. Medical aid is necessary to afford these services and pensioners should ensure that they have the best medical aid cover that they can afford.
Medical Aid Covers Pensioners and Retired Seniors
Many South Africans are under the misconception that medical aid cover falls away at a certain age. This is untrue. There is no age limit for the elderly to be covered by a medical aid. The fact that you are not earning a salary also does not prevent pensioners or retired seniors from getting medical aid. Any person of any age over 18 years can join a medical scheme if they can afford it.
However, seniors need to be aware of the late joiner penalty (LJP) and waiting periods. These are two potential problems that can make medical aid for pensioners very costly and delay the cover for treatment of pre-existing conditions. As finances and time are major obstacles for pensioners, it can make the difference between having medical aid cover or not.
Late Joiner Penalty for Seniors
It is important to understand that medical aid rates do not differ for individuals on the same plan, irrespective of their health status. However, the late joiner penalty (LJP) is an additional fee that is added to the monthly medical aid contributions for any person who joins a medical aid after the age of 35 years. This penalty can significantly increase premiums of medical aids for pensioners.
The late joiner penalty is calculated according to the number of years without any medical aid cover after the age of 35. It is not surprising that it can sometimes increase medical aid premiums to a completely unaffordable level for many pensioners. It is therefore important to start medical aid as soon as possible in life, before penalties and pre-existing exclusions by the medical aid become an obstacle.
Waiting Periods for Seniors
All medical aids have a 3 month general waiting period that applies to all new members, irrespective of age, income level or health status. This waiting period means that the medical scheme will not pay for any healthcare costs within the first three months of cover. The 3 month waiting period does not apply for pensioners or seniors who were covered by another registered medical scheme and moved to a new scheme.
However, even after the three month mark, pensioners need to be aware of the 12 month pre-existing condition waiting period that may still be applicable. This waiting period applies to any condition that existed before starting medical aid cover. The scheme will not pay for medical bills for these conditions until after twelve months (one year) has passed from joining the scheme.
Affordable Medical Aid for Pensioners
The question of affordability is highly dependent on the individual. For the pensioner who is dependent on a government pension, medical aid can be unaffordable without very strict financial planning. Retired seniors with a private retirement annuity (RA) or company pension that is significantly higher than the government pension grant may be less restricted when it comes to affording medical aid. Nevertheless, the impact of late joiner penalties and waiting periods needs to be considered.
Firstly, retirees should consider a company medical aid if this is an option from a former employer. However, when this is not an option then pensioners should consider an open medical scheme. Most of the large open medical aids in South Africa have low cost plans for people with an income under a certain threshold. Although these plans are restrictive and may only cover treatment with network hospitals and doctors, it is often the more affordable medical aid for pensioners.