Is self-funded healthcare the answer to cheap medical aid?

Medical aid schemes demand thousands from their members. Then, every year they increase the fees, typically by double digits.

South Africans are choosing another way: self-funded healthcare.

Working South Africans are Choosing Self-Funded Healthcare

There’s a joke Cape Town comedian Nik Rabinowitz makes about growing up directionally confused. He shares how his mother never gave their family doctor the correct address. She did this to avoid being overcharged.

Of course, he tells the joke much better.

Back then, it may have been the kind of car you drove or where you resided that determined how much a doctor’s visit would cost. Now? That depends on what kind of medical aid you have.

People share anecdotal evidence about getting more referrals or being overtreated because they have medical aid.

For that reason, South Africans are turning to self-funded healthcare.

What Would It Cost You to Self-Fund Your Healthcare?

Most healthy adults who don’t have children wouldn’t spend more than R10 000 a year on private healthcare.

The cost, however, fluctuates. In one year, you could spend more if you have several medical emergencies. In another year, you could spend R3 000. Rather than focus on the overall cost to self-fund healthcare, you focus on the cost of individual care. Then estimate what you would need based on your health or your family’s health history.

Blood Tests

Paying cash saves you 20% on blood tests. However, depending on the tests, that could be a payment above R5 000.

Dental Care

Expect to pay at least R550 in consultation fees when you visit the dentist.

Dental x-rays range from R400. But this isn’t a full X-ray. Instead, it’s for one of the four jaw quadrants.

Fillings start at R600; temporary fillings are R750. Simple extractions cost roughly R350 per tooth. For wisdom teeth, the cost increases to R600; impacted and surgical tooth extractions cost R1 500.

Braces

Dentists can refer you to an orthodontist for braces. The consultation for braces should be the usual consultation fee. At the orthodontist, expect to pay between R25 000 and R45 000 for braces or R1 700 a month for the duration of the treatment, typically 12 months.

Doctor’s Appointments

You can get a private doctor’s appointment for R700, or a nurse-assisted virtual doctor’s appointment at Clicks or Dischem for R350.

Medication

Medical aid prices on prescriptions are higher than the cash price. It’s not the cost of the medication that’s decreasing, but the dispensing fee. If you’re on a medical aid, the pharmacist will charge a higher dispensing fee.

Specialists

Some speculate doctors refer their medical aid patients to specialists more frequently than cash patients.  Whether or not that’s true, when you pay in cash, a consultation with a specialist can cost upwards of R1 200 for the first visit, but follow-up visits dip below R1 000.

Scans, X-rays and Blood Tests

You’ll save 20% on blood tests if you don’t belong to a medical aid.

X-rays and scans range from R800 to R1 500.

Procedures

Mediclinic offers fixed fees for 70 procedures. Some medical scheme plans don’t cover procedures. Therefore, it’s an expense members have to budget for. Expect to pay between R4 360 for a diagnostic gastroscopy and R72 870 for a shoulder replacement.

How to Budget for Medical Expenses without Medical Aid

You can either fund all your medical expenses out of pocket or use a healthcare plan. Dischem and Discovery offer the latter for roughly R600 a month.

If you choose to self-fund your expenses, you should save every month what you would expect to spend on a healthcare plan or medical aid.

You would also need to subsidise your savings with a hospital plan.

If you’re not experiencing a medical emergency, use the options at your disposal for free care.

Then you want to do your checkups at scheduled intervals when you know you have money, rather than waiting until you feel sick. You can use a tax refund or your bonus payment to cover these costs.

How to Make the Switch from Medical Aid to Self-Funded Healthcare

Cancelling your medical aid membership isn’t something you can do spontaneously, especially if you have children. There’s a process, a transition period.

You’ll have to start by calculating the cost of your health care from the prior year and contrast that with what you’re paying for medical aid.

Then, to build up savings to avoid going into debt if you choose self-funded healthcare, you’ll need to downgrade your medical aid.

Finally, for a year before you cancel your plan, you’ll begin saving the difference between your previous medical aid package and your downgraded one.

After 12 months, you should have enough in savings to cancel your medical aid membership.

What about the perks?

The greatest perk will be saving thousands a year.

If you’re spending R2 800 a month on medical aid, that’s R33 600 a year. Setting this money aside develops a healthy saving habit. Besides, you can spend the money on other financially responsible expenses.

To cover the healthcare costs for major medical emergencies, consider getting a hospital plan.