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Noticing a big hole in your bank account where your money should be? You can probably thank your health insurance. According to the Private Health Insurance Ombudsman, full cover for a NSW family now costs between $141 to $245 a month. Add a few extras and you’re looking at a monthly bill of between $207 and $413. And this is set to balloon again from April 1, with health minister Sussan Ley recently confirming a rise of an average of 6.18 per cent.
But don’t despair – the increase may be out of your hands, but you can still take control of your premium. Here’s how:
Make sure your plan reflects your life stage
The most important thing you can do while reviewing your health cover is to evaluate whether it’s in tune with who you are as a person and where you’re at in life, but also where you plan (or hope) to be in a year’s time. For example, if you’re planning to have a baby in the next year or so, you may want to consider a plan that covers obstetrics. Likewise, if your child is keen to take up rugby when they start school, a service such as student accident cover might be a useful addition. This way you’re only paying for the things you need and will most likely use.
Review your extras
The beauty of extras cover is that it can give you access to all sorts of wonderful treatments, from massage and acupuncture to programs such as weight management, but they’re also a sure-fire way to send your premium skyrocketing. If you’re opting for a premium that includes extras, it’s worth noting the most commonly used (and therefore useful) ones in Australia are ambulance cover, minor dental and optical. Outside of that, always take family history into consideration when you’re asking yourself what you might need.
Rethink your excess
One of the quickest ways to reduce your premium is by increasing your excess (the amount of money you agree to pay for a hospital stay or treatment before health insurer benefits are payable should you require admission). Although it hurts a little less in the hip pocket to tick the greater excess box at the time, consider whether you’ll be able to afford to make that payment outright in case of an accident or illness. Some funds offer co-payment plans where you pay a nominated daily amount towards the hospital bill instead, but note there are a few policies floating around that require you to pay both so choose wisely.
Be creative with your payment plan
Rather than sticking with paying the usual monthly rate, investigate the many other ways you can manage your policy to attract lower premiums. You can:
- Lock in your premium before the rate rise and pay up to 13 months in advance at your current rate.
- Direct debit your payments, which can potentially save you about 4 per cent.
- Speak to your employer about salary packaging your health insurance the next time you discuss performance reviews or pay rises.
- Speak to your health fund about whether any discounts apply to your personal situation. Some funds may offer a lower premium in return for exclusions or certain limited benefits.
- Check with any societies and unions you’re a member of to see whether you’re entitled to health insurance discounts.
Walk the talk
If you’re not happy with your premium, remember that there are thousands of policies available nationwide and dozens of insurers who are more than happy to take your money. Switching funds is as easy as shopping around on a price and package comparison site (or the government-run privatehealth.gov.au) and answering a few easy questions. And don’t worry, you won’t be penalised for switching funds because if you’re switching to a similar or lower level of cover, the waiting periods you’ve served are usually transferred with you.
Get the most out of your health fund
When you’re paying a premium for your premium, you need to get more for your money.
Use your health-fund service provider list for treatments
Most health funds have “agreed providers” that they work with and most will either offer a gap-free treatment, which means you’re not left out of pocket, or they’ll charge a minimal amount.
Make sure your health fund is well-connected
Before you sign up, ask to see a list of service providers and private hospitals in your state which have an agreement with your fund. The last thing you want is to travel to the other side of town just to see a doctor.
Do your research
Always get an estimate of fees from your service provider and check the item numbers with your health fund before commencing treatment. This will avoid financial surprises at the end.
Spread the love
There’s nothing to say you have to purchase basic and extras cover from the same fund. Search for packages but also weigh up whether it’s cheaper to purchase them individually from different funds.
Set an annual date
Don’t forget to review your policy every March before the next lot of premium rises kick in.
Investigate the government rebate
If you’re eligible for Medicare, you have access to the Australian Government Rebate on private health insurance. Depending on your income and age, the subsidy could see you pocket a rebate of up to 38.72 per cent. Visit humanservices.gov.au.
Health insurance myths explained
Sarah Cannata from private health insurance comparison servicehelpmechoose.com.au sets the story straight on insurance myths.
Myth: You’re locked into a contract
Fact: Policy holders can switch health funds at any point. Terms and conditions may apply. After switching providers, and as long as you haven’t made any claims, a 30-day cooling off period will apply if you change your mind.
Myth: You’re not covered for a pre-existing condition
Fact: Once the 12-month waiting period on your policy has been served, your pre-existing medical condition should be covered, as long as your chosen policy includes cover for that treatment.
Myth: You won’t pay the Medicare Levy Surcharge if you take out extras-only cover
Fact: If you do choose to lock in extras-only cover, make sure you have a Medicare levy exempt hospital policy, otherwise you could be slugged with the Medicare levy surcharge after all.
Myth: Private health insurance covers emergency fees at private hospitals
Fact: Emergency facility fees are seen as outpatient consultations. In other words, your provider won’t pay anything towards these fees if you’re not admitted. Medicare will cover a portion of the cost but you could be left out of pocket. Check exactly what your policy covers.
Myth: Private health insurance means you won’t pay the tax or Medicare Levy
Fact: Most taxpayers will pay the 2 per cent Medicare levy, even if they take out private health insurance, however, you may be exempt if you’re a foreign resident or if you meet certain medical requirements. If your income is above the threshold and you don’t have adequate cover, you’ll pay the additional Medicare levy surcharge.
Myth: You’ll be entitled to total coverage for extras
Fact: A standard policy may not cover everything you require, and entitlements vary from fund to fund depending on the cover.
Source: bodyandSoul
