*This post is based on the Australian private health care system, if you are an international reader, please be sure to check for information relevant to your country*
Dealing with health insurance is enough to raise most people’s blood pressure. There are so many options and it is extremely difficult to compare. Here I’ve got some simple tips to ensure you are getting the best deal and making the most of your health insurance.
If you don’t take out private health insurance before you are 30 the government will kindly lump you with an age based loading. It’s therefor very important to ensure you take out private health insurance by your 30th birthday. If you are over 30 and haven’t taken it out yet, do it as soon as possible as the loading increases the older you get! You need to take out either a hospital or combined package to avoid the loading. Extra’s only cover won’t cut it.
Earning over the threshold?
There is an additional Medicare levy surcharge for individuals and families who earn over the Medicare levy surcharge threshold (currently $88,000 for singles and $176,000 for families). In most cases, the extra you will pay in tax is equal to or more than what you would pay to take out a basic hospital policy so you are much better off taking out a hospital policy. Taking out an extra’s only policy won’t prevent you from being charged the surcharge so make sure you get a hospital or combined policy. There is also a cut off on the excess your policy can have so if you take out a policy with an excess over $1000 you will still be charged the levy. Make sure you check with the insurance company before signing up.
Choose where you compare carefully
There are quite a few online companies that offer to find you the best deal on your health insurance. These can be a good option for some but in reality they don’t compare even a fraction of the available options and in my experience, exclude some of the best member run not for profit insurers. The companies take a commission for recommending various products so the not for profit insurers without big advertising policies often miss out.
My pick for comparing policies is the government website www.privatehealth.gov.au This website compares all the available policies and you can download an overview of each one to compare like for like. Keep in mind that the policy premiums stated are before any rebate but you can work out what rebate you would receive using the calculator on their site.
Review your policy once a year
Most companies increase their premiums in April each year so this is a good time to review your policy. Premium increases vary from company to company and the best deal last year may not be so great this year.
Do the sums on extras benefits
You can make extras benefits really work for you if you are selective about the policy you choose. Some policies cover things such as vitamins, remedial massage, gym memberships and yoga as well as the basic dental and optical. If you are a big user of natural therapies make sure your policy has good limits for these. A good starting point is to work out roughly what you spend each year on various categories and what you will get back from your extras cover. Compare this to the benefit you pay and work out if it is worth it. If you don’t wear glasses, rarely visit the physio etc then you may find you are better off putting aside the equivalent of the extras cover payment into savings each month and drawing on it as needed. Also check the overall limits for each category. If you use lots of physiotherapy for example make sure it has a high individual limit. Consider the difference between basic dental and major dental as well, if you are likely to need root canal, a tooth removed or braces, take this into account when choosing your policy.
Make sure your policy includes all the services you need (and preferably doesn’t include those you don’t). Are you likely to want to have you baby in a private hospital? Make sure obstetrics is covered. Likewise, if you are a 60 year old couple you can probably drop the obstetrics cover from your policy. Things like cataract surgery, joint replacements and IVF are commonly excluded benefits. My parents recently discovered that their otherwise good health insurance policy was not going to cover even a cent of my dad’s cataract surgery. An expensive lesson to learn after the fact!
Claim, Claim, Claim!
This may sound silly but many people have private health insurance but no idea what they can claim on it. This is mostly the case for extra’s cover where everything from massages to vitamins can often be claimed. Check your policy and lodge claims for everything!
Who are you currently insured with? Are you happy?