Q&A Forum: What's the best medical scheme for my 65-year-old mother?
Experts answer your questions on medical aid and the real cost of buying a house. Send your personal finance questions to Money@tisoblackstar.co.za
As our parents transition into retirement, we find that they are required to live on a very tight budget, often with small CPI-related increases.
Q: My 65-year-old mother is on a medical scheme, but it has become too costly for her to maintain. We’re considering adding her onto our medical scheme as an adult dependent. Is this more cost effective than being on her own, what are the requirements to add her, and are there any differences between schemes we should be aware of? If it’s not viable for us to add her as an adult dependent, what’s the best, most affordable basic medical scheme cover for someone her age? — Meryll, via e-mail
A: Jill Larkan, head: healthcare consulting at GTC, responds:
As our parents transition into retirement, we find that they are required to live on a very tight budget, often with small CPI-related increases (for the lucky ones). We also see that medical scheme increases are often about 2% higher than CPI, resulting in ever-increasing pressure on disposable income. Given this predicament questions such as yours are raised more and more often in the hope that healthcare brokers can offer some respite to this situation.
Important factors to remember at the outset are:
- The premium for a dependent on most schemes is cheaper than that of a main member.
- Elderly members are statistically more expensive to schemes, and their cover requirements are higher.
- Due to increased pressure on disposable income, we find that most pensioners downgrade cover and end up on inappropriate, very basic, or entry-level plans which carry heavy exclusions on “elderly related” benefits such as joint replacements or back treatments.
- When transferring between schemes, the new scheme usually imposes a three-month general waiting period.
Different schemes offer varying levels of cover on their different plans. Some plans may be comprehensive, with “cover it all” types of benefits, while others may have limited savings accounts for day-to-day benefits, and others no savings accounts at all. Depending on what type of plan you are on, you may find that having your mom on your scheme could result in all of your savings being allocated to her.
Our advice (without more information) is that your mom stays on her own plan, either:
- Downgrading as her income comes under increasing pressure; or
- Maintaining her level of cover, while accepting financial assistance from family members.
Plans can be upgraded annually as health deteriorates and more cover is required. Even though your mom may be healthy now, and may save on premiums when downgrading, she retains the right to upgrade again if and when her health deteriorates. Regrettably this will incur increased premiums.
Q: I recently put in an offer to buy my first property. My estate agent explained that I would be responsible for paying the lawyer’s fees to transfer the property into my name, but I was told that the seller gets to choose the legal firm. Why should this be so, when I am paying the legal costs? —Northcliff resident, via e-mail.
A: Liora Bamberger, founder of Liora Bamberger Private Clients and a practising attorney, notary and conveyancer in Johannesburg responds:
The seller, traditionally, has the right to nominate the conveyancer, but this is a matter for negotiation and agreement by the parties.
Likewise, the purchaser is responsible for payment of the transfer costs, including transfer duty and transfer fee, deeds office fee, deeds office search fee and courier fee to deeds office. Other fees include a FICA fee, postage and petties, electronic facilitation fee and lodging agent’s fee. On a purchase price of R1.5m the fees can amount to about R50,000.
In order to protect the purchaser, the transfer costs are regulated by law and the conveyancer may not charge above the tariff amount.
Any conveyancer who overcharges can be reported to the Legal Practice Council and will be ordered to refund excessive charges to the client.