Private healthcare plays a key role in Australia’s health system, relieving pressure on the public health system. 1 in 2 Australians hold some level of private health insurance. According to a recent Australian Competition and Consumer Commission (ACCC) report, most Aussies are concerned about the complexity of private health insurance policies, with loads of different terminology and jargon.
To help, we have pulled together a cheat sheet with 5 things you should know before you pick the right policy for you.
1. Know the difference between hospital and extras cover
When picking a policy, you can choose 1 of 3 types of cover: hospital cover only, extras cover only, or one that combines hospital and extras. ‘Hospital cover’ includes accommodation and in-hospital medical treatment. ‘Extras cover’ helps cover some of the costs of non-hospital services — like dental, optical and physio. Purchasing only ‘Extras cover’ may suit you if you are content with the level of cover provided through Medicare, but would like the benefit of reducing out-of-pocket expenses for treatment not covered by the public healthcare system.
2. Waiting periods
A waiting period refers to the amount of time a member must wait after taking out their cover, before they can access the benefits included in their policy. For example, you may need to wait 3 months before you can access your dental cover benefits and 6 months before you can start using your optical cover.
The most common promotion is waivers on waiting periods for particular procedures. For example, some funds may waiver major dental waiting periods. If you are looking to increase your cover for a particular service, it’s worth talking to a broker or insurance comparison company. They’ll be able to tell you if there’s a fund with a special offer that suits your needs.
4. Mix ‘n’ match
You may not realise but you don’t have to buy hospital and extras cover from the same health fund. Separating the 2 policies is possible. For some, this option may offer a much broader range of options and more appropriate cover and better savings.
5. No need to re-serve waiting periods when you switch funds
If you’re not getting the returns you want with your current health insurance, it is worth checking out other funds. Legislation now gives health fund members the right to switch funds on the same level of cover – without having to serve new waiting periods in most cases. Hell yes!
6. Know the jargon and what key terms really mean.
Here are a few common terms explained:
- Premium: The amount of money that must be paid for your health insurance policy, for a specified period of cover.
- A fixed benefit: A set amount of money that is payable for a particular extras service or item. Your insurer should be able to tell you up-front what your benefit will be.
- Excess: The amount you must pay towards your same day or overnight hospital treatment. Like the excess you might be required to pay for car insurance. This will vary, depending on what level of cover you have.
- Gaps: Any out-of-pocket expenses you’ll incur, and the difference between the fee charged by a provider and the amount your insurer will pay for the service.
7. Going Overseas – you may be able to suspending your cover and save
Health insurance policies do not pay benefits for services incurred or good recieved while overseas, so consider separate travel insurance before jetting off.
If you are going overseas your health fund rules may allow you to suspend your health insurance policy – check with your fund. The amount of time you can suspend your policy depends on the insurer.
8. How to choose the right private health insurance policy?
If you do your research and talk to the experts, you can choose a fund that best suits your health needs.
Start your search with trusted independent sources, such as the Australian Government’s Private Health Insurance Ombudsman or Canstar and compare the policies based on your needs. Then talk to individual funds for detailed information about any policy you are interested in, and to understand what you are actually covered for.
Before signing up:
- Read the policy details and talk to experts to make sure there are no restrictions for common procedures.
- Check you have a broad range of coverage with a wide range of services available for you to access.
9. Are you eligible for a restricted membership fund?
Some people are eligible for funding for private health insurance. These policies are only available to people (and their families) who are current or former members of a specific industry or organisation, such as teachers, the navy and the police. These funds often provide very good value.
Navy Health Ltd, Doctors’ Health Fund, ACA Health Benefits Fund, Reserve Bank Health Society Ltd, TUH, Police Health, CBHS Health Fund Limited, Railway and Transport Health Fund Limited, Defence Health Limited, Teachers Health Fund.
Want another reason to get private health insurance?
Most Australians with private health insurance currently receive a rebate from the Australian Government to help cover the cost of their premiums. The private health insurance rebate is income tested. You can work out your rebate entitlement through the Private Health Insurance Rebate Calculator on the ATO website, or call the Australian Taxation Office (ATO) on 132 861.