Medical expenses – how to avoid an unexpected burden
Review spoke to FinSafe Director and Financial Advisor, Jaco Visagie, about medical expenses and why they seem to wane faster than one's condition.
POLOKWANE – Suffering a serious injury or treating a life threatening illness can have financially crippling consequences that not many people can afford. Many South Africans empty their savings accounts, take second mortgages on their homes and sell their belongings in order to afford medical bills and treatment.
Review spoke to FinSafe Director and Financial Advisor, Jaco Visagie, about medical expenses and why they seem to wane faster than one’s condition.
“The reason for high medical expenses is two-fold. First of all, medical premiums have been increasing at exuberant rates as medical inflation has amounted to approximately 13% year after year in the last five years. Secondly, premiums have increased because more people survive serious illnesses for a longer period of time than they did in the past. Statistics show that with the right treatment and care, more than 50% of men and 65% of women diagnosed with cancer can expect to live five years longer because of an extra medical treatment period. Other research done via the British Heart Foundation indicates that 50% of heart attack victims live 10 years longer. Longer survival periods, therefore, mean longer treatment periods, resulting in higher premiums overall,” he explains.
With regard to the debt often incurred due to medical expenses, DebtSafe Debt Management Expert, Wikus Olivier, from Gauteng shared his thoughts on medical debt.
“Debt resulting from medical expenses is what is referred to as incidental credit. It is a dangerous kind of debt because it is unlike credit which you plan-and willingly apply for. This kind of debt is as unexpected as the illness itself, which is why medical bills could quite easily lead to financial demise in the case of serious and life-threatening illnesses.”
He points out that although medical expenses can lead to a significant debt burden, there are pro-active ways to avoid it or lighten the load.
“Each family should have a financial plan that includes at least basic medical risk cover. This must be one of their non-negotiable expenses. Consumers cut back on this expense too easily in tough times but that’s when you can least afford the expenses of an unexpected illness,” he explains.
Here follows a few tips to help you deal with debt:
• Do your homework and know what you need to save for beforehand in order to be prepared for co-payments needed for certain procedures.
• Find out how the tariffs paid by your chosen medical aid compare to the fixed rates as well as other charges by some doctors and specialists.
• Be aware of funds that offer an annual hospital limit per dependent and if you can afford it, look for a plan that offers unlimited hospital cover.
• Pay special attention to the Oncology programme that the medical aid offers as well as the annual limits, out-of-pocket deductibles, co-pay, or co-insurance costs.
• Take a look at ambulance service benefits and possible surcharges that you may be liable for.
Olivier advises that it would be wise to talk to a debt counsellor if your medical bills are excessively high and you are over indebted because of it. He explains that when entering the debt review programme, a debt counsellor will negotiate on your behalf with your creditors, reducing your expenses to fit your income.
No one can predict illness or injury, but you can plan for it – so don’t delay talking to a registered financial planner.
On the other hand, if your existing medical bills are threatening your financial well-being, contact a debt management expert to assist you as soon as possible. In both cases it is always wise to take action sooner rather than later.
