Pensioner Benefits and Senior Cover After Retirement
Although pensioners can rest assured of medical aid benefits, the same does not apply with hospital cash back cover. Medical aids in South Africa cannot discriminate on the basis of age and any person of any age can join a scheme and remain covered throughout life. However, hospital cash policies do not cover a person over the age of 65 years and will fall away once a person becomes a senior citizen. It is not about whether you are retired and receiving pension or still working on your senior years. Age restrictions are part of the hospital cash policy conditions which are essentially insurance policies. Medical aids are covered by a separate piece of legislation and therefore do not have these age restrictions.
Joining a Medical Aid
If you are a pensioner looking at joining a medical aid, then you can rest assured that you will be covered. While medical schemes will not refuse you cover for being a senior citizen then can impose a late joiner penalty to your monthly premiums. This applies to any person joining a medical aid after the age of 35 years and is not a condition applied solely to seniors. The older you are after the age of 35 years, the higher your monthly medical aid premium. But if you can afford it, then you can enjoy the benefits of a medical aid. Fortunately pensioners have a much higher tax benefit for medical aid premiums than younger adults so this is some financial relief to the elderly.
Late Joiner Penalty
Late joiner penalties vary depending on your age. You can pay about 25% more if you are just a few years past 35 years of age but this can jump to as high as 75% of the premium as you get older, sometimes even higher. It may seem unfair to have to pay a higher premium for joining a medical aid later in life but it is a measure to protect the finances of the scheme and cover for the existing members. Remember that medical aids pool the money of its membership together and pays out for those who need legitimate medical care. Younger members who are usually healthier contribute to a scheme may never claim from a medical aid or use much less benefits. Older and sicker members require more benefits.
A person who does not have medical aid prior to 35 years has essentially saved on the expense of medical aid in the healthy years of their life but wish to join as they get older and need to claim. It is unfair to the loyal members who have had medical aid for decades and paid their premiums in this time even though they were healthy and probably hardly ever claimed. Since schemes know that they are more likely to be paying out for claims for people later in life, they impose a penalty for people over 35 years, who are more likely going to be of the age to claim more prolifically.
The benefits on a medical aid does not change based on age. It is dependent on the level of cover you have in terms of the plan you opt for. If you have comprehensive medical aid then you can enjoy outpatient, chronic and hospital cover. However, if you opt for a cheaper medical aid hospital plan only then you will only be covered for chronic benefits and in-hospital care. In this instance you will have to pay for your out-of-hospital costs from your own pocket. Many seniors who join medical schemes later in life opt for hospital plans only as it is cheaper and covers the most costly part of private healthcare – hospitalisation. After the 3 month general waiting period and 12 month pre-existing condition wait, seniors can rest assured of full medical aid benefits.