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How to Choose a Private Health Insurance Policy?

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How to Choose a Private Health Insurance Policy?

Save money and worry by finding the health cover that’s right for you.

Taking out private health insurance is about choice, control, peace of mind and planning for the future. For Australians who want to take a more proactive approach to their health care, private health cover gives consumers more say about the ‘who, what, when and where’ of the medical services they use. Potential benefits of private cover include shorter waiting times for procedures, more choice in the timing of medical appointments and an increased sense of security about meeting future health care needs.

The financial benefits to taking out private health cover are also an incentive, especially in regard to avoiding monetary penalties such as the Medical Levy Surcharge for high income-earners and the Lifetime Health Cover Loading that affects over-30s without private health insurance. Extras cover offers policy-holders the further financial advantage of access to specialist health services that may not be well covered under Medicare, such as dental visits, optical, physiotherapy, chiropractic, etc.

Whatever your own reasons for taking out private health insurance, it’s important to get maximum value for money and find a policy that’s appropriate for your present and future needs.

Whatever your own reasons for taking out private health insurance, it’s important to get maximum value for money and find a policy that’s appropriate for your present and future needs.

If you’re confused about private health cover, don’t worry – you’re not alone!

Over half the Australian population has some form of private health insurance, but a 2016 survey found that half of these consumers weren’t confident they understood what their policy covered. What’s also alarming is that only one out of four people were finding it easy to compare health insurance policies. This study also found that only 38 per cent of existing policy-holders were ‘satisfied overall with their policy’.

With so many health insurance products on the market, it’s easy to feel overwhelmed by the choices, but reducing confusion is mostly a matter of looking more closely at your individual needs. Your budget, age, lifestyle and relationship status all play a part in the decision-making process, so you need to think about things like whether you want ambulance cover, dental cover or physiotherapy cover. Are you after an insurance package that helps you pay for prescription eyewear? Are you willing to pay a higher excess in exchange for lower premiums? If you have children or are planning to start a family, this affects your choice of cover too.

Over half the Australian population has some form of private health insurance, but a 2016 survey found that half of these consumers weren’t confident they understood what their policy covered.

Ask the right questions

In Australia, health insurance policies vary considerably. It’s vital to get answers to the most important questions when you talk to a potential new insurer. Here are a few questions you might want to ask:

  • How long do I have to wait to be covered?
  • When does my cover begin?
  • Will I need to re-serve my waiting periods if I switch to another insurer?
  • What does this policy give me that Medicare doesn’t?
  • Will I be able to choose my doctor?
  • What hospital treatments are covered – and not covered – by this policy?
  • Will I be able to have a private room in hospital?
  • Is ambulance cover included with the hospital cover?
  • Under what circumstances would I be ineligible for benefits?
  • What will my out-of-pocket expenses be with this cover?
  • Which hospitals have agreements with this health fund?
  • What level of hospital/medical benefits are paid with this cover?

Comparing private health insurers – what to look for

Just about everything is done online these days, including dealing with insurance providers. But if you’re looking at a new insurer, the first thing to check is that they operate in your state or territory. Not all private health funds operate in all parts of Australia. Next, you should take a close look at how they define and cover dependents. Make sure you understand who is covered in your policy and what rules the health fund has about dependents.

Most importantly, be diligent and read the fine print so you know exactly what you’re signing up for. Insurance companies are always telling us to ‘please read the product disclosure statement’ when we apply for a new policy, and this is important advice. Unfortunately, too many of us don’t bother, only to find out later we didn’t fully understand the details of our cover. Unfortunately, the ‘Sorry, didn’t read it, way too boring’ defence doesn’t cut it!

Look for an insurer with flexibility. The more choices they offer, the better your chance of finding a policy that works just right for your lifestyle and current situation.

Look for an insurer with flexibility. The more choices they offer, the better your chance of finding a policy that works just right for your lifestyle and current situation. If you find a policy that locks you into paying for benefits you don’t feel you need (and doesn’t provide a more tailored alternative), it may be time to look elsewhere. A super-cheap policy that’s also super-restrictive isn’t going to provide much value for money.

There are a number of online comparison sites that make it a cinch to check how different insurers match up against each other. You can also find unbiased health fund reviews on websites like Choice and Canstar’s Compare Health Insurance page. Once you’ve narrowed down your choices, head to the insurance provider’s own website to investigate the full details of their offerings for both Hospital and Extras cover. Check out their policy pages, Frequently Asked Questions page, guarantee and all information they provide about their claims process.

Many insurers offer an attractive incentive or two to attract your business. This might come in the form of a multi-policy discount, where you can get a better deal if you already have another type of insurance with them (car, life, home, etc.). In other cases you might see a ‘No Wait for Extras’ deal if you buy a combination Hospital Cover and Extras policy by a certain date. Buying your Hospital and Extras Cover at the same time in a single policy may also result in some savings.

The devil is in the details

To fully understand your private health insurance you need to be aware of the policy’s terms, conditions, limits and exclusions. Insurers have their own terminology and definitions. For example, when a particular insurer mentions alternative therapies, what specifically does that include? Which types of massage are covered? Is Chinese Medicine excluded? Is acupuncture covered? These are the sort of details that matter.

If you’re not quite sure what a term means, ask your provider for the definition and how it applies to your individual policy.

If you’re not quite sure what a term means, ask your provider for the definition and how it applies to your individual policy. With Extras cover, for example, you’ll need to understand the difference between General Dental and Major Dental: General Dental refers to treatments aimed at maintaining teeth and prevention, while Major Dental involves large-scale dental work such as crowns, extractions, root canals, bridgework, etc.

If you have a pre-existing medical condition, find out how that affects your Hospital Cover. If you’re planning to change from Couples Cover to Family Cover, find out about obstetrics waiting periods. Check on the extent to which you’re covered for cosmetic surgery, if at all. Does your insurer have ‘participating dentists’ or can you choose your own? Can you claim on new prescription lenses put into new frames? Many of these questions can be answered on your insurance provider’s website, but if you can’t find the answer you need, contact the insurer directly.

Buy on value, not price

There are some excellent private health insurance policies out there, so shop around and find the one that suits you!

The health industry in Australia is currently in a state of rapid change as the government copes with increased demand and aims to create a simpler and more transparent system. Rules that applied to private health cover last year may be different this year. That’s why everyone should take a fresh look at their private health cover at least once a year to see if it’s still meeting their needs. Your requirements aren’t static and neither are the policies of government or the offerings of individual health funds. While it can often seem easier to just go with the same health insurer you’ve been using for years, this can be costing you money if you’re missing out on a better deal elsewhere.

‘If it looks too good to be true, it probably is.’ This age-old warning applies to private health insurance as much as anything else. If you come across health cover that seems appreciably cheaper than the norm, always ask yourself why. Carefully check the restrictions and exclusions as well as the dollar amount of the benefits being paid. The last thing you want is a policy that’s so limiting that it doesn’t provide the financial protection you need.
There are some excellent private health insurance policies out there, so shop around and find the one that suits you!

1 http://www.abc.net.au/news/2016-01-08/private-health-insurance-policies-confusing,/7076526