Discover why joining a medical scheme is crucial for financial security, especially for young and healthy individuals. Learn about the hidden costs of medical emergencies and how to budget effectively for your health and wealth.
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Joining a medical scheme is about preventing debt, says Karin Mitchelmore, executive head of healthcare consulting at financial advisory firm NMG Benefits.
She says being young and healthy doesn’t mean you’re financially protected. Case in point: an NMG Benefits client with no medical cover recently faced a R2.5 million bill after a car accident. Could you afford to pay that out of your own pocket?
“Even so, we see many people waiting until they need medical care before trying to join. They then face 12-month waiting periods and possibly late-joiner penalties that have immediate financial consequences and lock in higher premiums forever,” she says.
The blind spot
“The error lies in thinking ‘it’ll never happen to me’, but the thing is that accidents don’t wait until you’re financially ready. With 9,674 road crashes reported in South Africa in 2025, your chance of being affected is higher than you think. Drivers, passengers, and pedestrians are all at risk,” says Mitchelmore.
For those who can’t afford comprehensive medical aid, she advises joining a basic hospital plan and supplementing it with gap cover: “Even if a medical scheme covers procedures and consultations at 100% of their rate, specialist doctors aren’t regulated to charge this rate. Sometimes their invoices can be 600% of the medical scheme rate. This is where gap cover steps in,” she says.
The wealth trap
But the challenge runs deeper than healthcare, says Stian de Witt, head of financial planning at NMG Benefits.
“We live in a ‘fast-food environment’ of instant gratification. It’s not that people don’t have money. It’s often that they’re driven by immediate status rather than long-term financial wisdom,” he says.
According to De Witt, this click-to-buy-now spending trend often leads to debt from impulse buying on credit. “We regularly see clients cancelling their medical, dread disease and disability cover, and their car and home insurance, and taking two pot withdrawals from their retirement savings… And waking up at age 45 in the same financial position as when they were 25,” he warns.
The solution
Financial security starts with prioritising your budget. Provide for your needs first (medical aid, insurance, transport, housing, food, and debt repayments; 50% of your after-tax income), then your ‘wants’ (lifestyle and experiences; 30%), and then pay your future self by saving for emergencies and retirement (the remaining 20%), he says.
And then, think creatively about what you really need. De Witt shares a powerful example: a senior colleague recently realised he didn’t need a car. With his wife’s car available when necessary, he Uber-ed everywhere, saving up to R7,000 per month by eliminating car payments, insurance, and fuel. Over three years, this saving could be as much as R250,000,a comfortable emergency fund, a profitable investment, or even a down-payment on a house.
Get help before you need it
Many younger people never learned how to budget. It’s not taught in school, and parents rarely talk to children about money. And there’s no shame in not knowing, says Dewitt.
"Start by getting a mentor, someone a few years ahead, with no vested interest in your situation, who’s been there too and can help you avoid making the same mistakes. If possible, working with a financial adviser also helps prevent costly missteps.
“It’s important to do the research before making any major financial commitments, and to understand the total cost of the debt before getting a credit card or a short-term loan, free educational resources exist,” says De Witt.
Avoidable costs relating to your health and wealth can be devastating if you don’t have the right cover in place. The younger you start, the cheaper your premiums and the better your returns, he says.
PERSONAL FINANCE