You should receive a letter from your health fund to let you know how much your premiums will be going up. If your health fund confirms a rise in line with or above the industry average, you may be one of the many Australians who plan to review their health insurance and adjust their cover or drop it completely.

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If the rate rises are going to have a big impact on your budget going forwards, you may want to think about other options that are available to you. Before you make any hasty decisions regarding your health insurance cover, remember that you can get around the premium increases by paying a year’s worth of premiums upfront. Here’s what you need to know about the prepay option.

The Benefits of Prepaying

Prepaying your health insurance premiums allows you to “lock in” your current rate so that the premium increases are postponed for another twelve months. This can avoid the need to downgrade your health insurance policy or opt out of private health insurance altogether but it will depend on your situation. If your budget can stretch far enough, it’s definitely worth having a serious think about paying your premiums upfront so that you can take advantage of the financial benefits.

What to Do

Time is of the essence here. You don’t have long to act if you do decide to prepay your health insurance premiums. To successfully “lock in” your current health insurance rate, you need to prepay in March. Bear in mind that your payment needs to have been processed by your bank before April 1st so don’t forget to factor this in when you arrange payment. It could take several working days for your payment to be processed. If your payment isn’t processed in time, you lose the benefits of prepaying.

Not everyone will be in a position to prepay their premiums before the cut-off. For those who can, it’s an option worth taking advantage of. If you can afford to do so, it can be hugely beneficial to prepay your health insurance premiums and avoid the dreaded rate rises. This can be particularly invaluable if your health fund is due to introduce premium increases that are higher than the industry average as it means that you can effectively delay the premium increase for another year. Of course, the big downside of prepaying is that you will need to have the necessary “wiggle” room in your budget to free up enough money to pay upfront – and you have less than a month to get the cash together and arrange payment.

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Private Health Insurance

People who are looking for excellent medical care have the option to go beyond Medicare and purchase private health insurance. It costs a bit of money, but there are ways to save if you need to, and many people consider it a crucial outlay to ensure their family’s health and security. Private health insurance gives you access to many benefits beyond the Medicare system, including your choice of excellent physicians, extra services, and short waiting times. Plus, the government provides rebates for those who purchase it as an incentive for more citizens to do so.

Private Health Funds

When you choose to purchase private insurance, you do so through private funds. In this system, you evaluate the many different funds available and pay the fund privately to receive your benefits. Most funds are open to anyone in the general public, although there are some that are geared to different populations, such as young families or the elderly. Certain people may also be able to apply for funds which offer them savings, such as teenagers.

Hospital Cover, General Treatment, or Combined

Within the private system, there are several choices. Hospital cover is the main component, covering hospital stays and treatments, such as surgery and psychiatric care.

General treatment plans cover out of hospital procedures and services such as dental, optical and chiropractic.

All choices come in a range of choices from broad coverage to a narrower set of services, so people can get just what they need in a plan. Most funds these days also allow you to pick and choose the services you need, so you don’t pay for services you won’t use. For example, a fund may allow you to choose the three treatment areas of your choice to tailor a medium range policy that fits your personal needs.

Consumers have the option to choose one or both of these options. While combined cover is the obvious choice for those who want comprehensive medical care, some recommend purchasing separate hospital and general treatment plans to get the most complete policies. When purchased separately, private policies may offer more comprehensive cover for all of your medical needs. Compare private health funds separately and combined to see where you get the greatest value.

Other considerations

In addition to categories for broad and narrow ranges of treatment options, there are plans for singles, couples, families, seniors and teenagers. Check out all available options that pertain to you, as you may be able to get significant discounts if you find a fund targeted toward you.

Restricted funds

There are fund groups that were created to meet the needs of specific professional criteria. These are often the most competitively priced, but they are exclusive to certain professions. If you can get in, it is worth a comparison to other private funds.

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Medicare and Diagnostic Tests

Medicare covers the following screening programs.

The National Bowel Cancer Screening Program. This program is aimed at Australians reaching their 50th, 55th and 65th birthdays before December 31st 2014. An average of a million Australians will be invited for screening each year.

The National Cervical Screening Program. This program offers routine pap smears every two years for women aged 18-69.

BreastScreen Australia. This program offers free mammograms for eligible women. Primary targets are women aged 50-69. Women aged 40-49 and 70+ are also able to be screened.

Diagnostic tests are also covered. For example, there are Medicare rebates for MRI breast scans. These are for women aged below 50 who have high risk of cancer. These are available even with no symptoms. Medicare rebates are also available for MRI rectal scans.

Medicare and Cancer Treatment

Cancer treatment can be extremely expensive so you’ll be pleased to know that Medicare does offer support with this. Your doctor should discuss treatment costs with you before you go to hospital. This will let you know whether there will be a gap to pay. He or she can also advise on how to find out about other treatment fees such as for the anaesthetist and hospital accommodation.

Medicare includes free public hospital treatment as a public patient. There are some downsides to this. You do not have a say in who treats you and you may have to wait for treatment. It will also cover 75 per cent of the schedule fee for in-patient hospital services. This does not include accommodation fees, theatre fees or medicines.

Not all cancer treatment will take place in-hospital and Medicare does cover some of this. Consultations with GPs are covered for full schedule fee. For other eligible out-of-hospital services, 85 per cent of the schedule fee is covered. This may include consultations with specialists, x-rays and pathology tests. Be aware that doctors can charge more than the schedule fee, which will result in out-of-pocket costs. If your out-of-pocket costs reach a certain amount, you can take advantage of the Medicare Safety Net.

Many cancer drugs are subsidised on the Pharmaceutical Benefits Scheme. This is designed to make prescription medicines more affordable. Chemotherapy drugs are often free of charge. For example, trastuzumab (Herceptin®) is free for treating late stage metastatic breast cancer. The PBS Safety Net can help if your costs reach a certain threshold.

Allied health services are available through the Chronic Disease Management program. You may be able to receive these if you meet the eligibility criteria. Firstly, cancer (or another chronic condition) must have been present for at least six months. Secondly, you need to be treated by two or more healthcare professionals as well as your GP. Thirdly, your GP needs to have drawn up a GP Health Management or Team Care Arrangement plan. If eligible, you can get up to 5 allied health services per calendar year.

Palliative care is covered by Medicare. This allows you to be treated in a public hospital. Health insurance will be needed for private treatment.

Health Insurance and Cancer Treatment

Medicare support is quite extensive but there are still some good reasons to compare health insurance options. Want to be treated as a private patient? You have much more control over who treats you and can be treated more quickly than as a public patient. Medicare will cover 75 per cent of the schedule fee for this. This still leaves some out-of-pocket costs to meet. Health insurance can cover some or all of this gap. This is also the case for theatre and accommodation costs and medicines.

If you need further diagnostic investigations, health insurance may cover these. Some health insurance options include colonoscopies, for example. This tends to be featured on the broader hospital packages so it’s wise to do a health insurance comparison to look at your options in depth.

Health insurance also covers out-of-hospital services that are not available through Medicare. Examples include physiotherapy and complementary therapies which may be recommended alongside your treatment. Psychology is another popular extra that may help with the stress of a cancer diagnosis. Sometimes, you may be prescribed medicine that is not on the PBS. This can be covered partly or fully by pharmacy extras cover.

Medicare is involved in several screening programs and also covers some or all of the cost of hospital treatments for cancer. How extensive this is depends on whether you want to be treated as a public or private patient and whether your doctor charges above the schedule fee. Many cancer drugs are included on the PBS and some are available for free. You can choose to compare health insurance options for broader support beyond Medicare.

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Coverage Type and Level

Your coverage type and level dictate which medical and health services you can access and how often you can use them.

• Private hospital cover pays for accommodation costs when you get admitted as a private patient in a private or public hospital. Fees associated with the pathological tests performed and use of the hospital’s surgical theatre may be paid for by this coverage as well. A portion of the attending doctor’s fees may be covered too.

• Extras or general treatment cover pays for dental, podiatry, and optometry services. This coverage may provide for alternative treatments such as chiropractic, acupuncture, and physiotherapy as well.

• Combined policies provide cover for both hospital and general treatments.

• Ambulance cover is an add-on which ensures access to round-the-clock and Australia-wide ambulance services.

• Pharmaceutical cover is another add-on. This gives cheaper access to medicines that are not listed under the Federal Government’s Pharmaceutical Benefits Scheme (PBS).

Health insurance is normally offered in three coverage level packages. You can choose from premium, medium, and basic levels. The higher the coverage level, the lesser the restrictions and/or exclusions will be. For instance, if you choose the premium hospital package, you may be covered for costly procedures such as joint replacement surgeries.

Government Surcharges

Starting 1 July 2012, the Medicare Levy Surcharge (MLS) will increase for large income earners who don’t have private hospital covers with deductibles of $1,000 (for families) and $500 (for singles). It would be worthwhile especially for affected Australians to review whether obtaining the appropriate coverage will be more beneficial given the reforms to the MLS scheme.

Particular Health Services

Every individual will have unique medical and health needs. Going for insurers that allow for tailor-fitting one’s coverage may then prove advantageous. This is particularly true if you must access specific treatments periodically. Being able to modify your coverage prior to inking the policy will ensure you’ll have ready and convenient access to services you most frequently require.

Reasonable Rates

If you’ve ever tried to obtain quotes from multiple insurers, then perhaps you’ve noticed how their rates vary. This is because factors such as coverage types and levels are taken into account when calculating your premiums. But there are a handful of ways to help lower your premiums.

• Age of entry into a fund is one. Under the Lifetime Health Cover (LHC), one will need to pay an additional 2% annual loading on top of the usual premiums for every year one did not have private health insurance after the age of 30. Avoiding the LHC is possible by signing up for a private hospital cover from an insurer certified by the Private Health Insurance Administration Council (PHIAC) on or before 1 July immediately after one’s 31^st birthday.

• Taking higher excess and/or co-payments is a guaranteed rate-lowering strategy too. Just make sure that the amount you nominate is really something you’ll be able to comfortably pay especially during times of emergency.

• Special discounts may help lower premiums too. Some insurers extend lower rates to single parents. Other providers lift restrictions on their extras cover after one year to encourage policy renewals.

Everyone wants a comprehensive yet reasonably priced policy. Fortunately, finding this is not impossible. A thorough health insurance comparison will help ensure you find the cheapest policy that provides for all the services you will need.

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Just what exactly are restricted funds?

Restricted funds are private health funds too. The only difference is that these are mutual funds. This means they are owned and managed by their respective members as opposed to for-profit funds which are held and run by their owners and/or shareholders.

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Are restricted funds accessible to everyone?

Restricted funds are for members only. To be eligible, you must belong to a specific trade or group. The transportation, education, banking, medicine, and forestry, timber and paper manufacturing are just some of the industries currently serviced by these funds. Folks who are members of specific religious organisations, and those in the police as well as the Australian Defence Forces may avail of these special private health funds too.

How do I know if I am eligible to join?

Restricted funds normally accept folks who are currently serving or have worked in or with any of the relevant industries for a specified length of time. Some providers of these policies even extend coverage to a qualified individual’s next of kin. A quick call to the relevant insurer should help determine your eligibility.

What types of plans are offered?

As was mentioned, restricted funds are private health funds too. This means you’ll also find the same health insurance packages such as hospital, extras, and combined policies that are being offered by for-profit insurers. The usual basic, medium, and premium coverage levels are offered as well.

I currently have a policy in place. Can I readily switch to a restricted fund?

Yes, this is possible. However, you need to acquaint yourself as to the waiting periods imposed by the fund you’d like to transfer to. This is particularly crucial if you’re looking to upgrade your coverage. But if you’re switching to a similar cover offering similar benefits, serving the waiting periods again may no longer be necessary.

How do I find the most reasonably priced restricted fund?

Restricted fund providers have been known to offer cheap health insurance. But just as with buying any type of insurance product, you need to compare health funds that are offered by these for-member institutions. This will ensure you get the package that answers your needs without necessarily breaking your bank. To expedite the medical insurance comparison process, determine which funds you can join first and compare their packages accordingly afterwards.

Are restricted funds affected by the new means testing system as well?

Yes, restricted fund members have to adhere to the changes to the private health insurance rebate and Medicare Levy Surcharge (MLS) schemes. Starting 1 July 2012, folks who expect to receive incomes higher than the set threshold will get lesser rebates. Higher-income Australians who do not take out private hospital cover with specific deductibles before said date will need to pay the MLS as well.

Restricted funds normally offer lifetime memberships. This means you can always continue said fund even if you’re transferring to an unrelated industry or profession. Similarly, you can terminate your plan and re-join the fund again at any time you wish.

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Public Health Care

Australians are afforded equitable access to public healthcare via Medicare. This means free use of select medical and health services offered by public healthcare institutions. There’s the Pharmaceutical Benefits Scheme (PBS) as well and helps guarantee lower prices for some of the most commonly prescribed medicines.

Private Health Insurance

One can only claim for a maximum number of medical or health services per year under Medicare. So folks who require periodic or continued medical attention may find the benefits being offered by the public healthcare system limiting. Fortunately, you can always turn to private health funds to address your needs. Some points to consider are:

Type of Fund

There are two types of private health funds in Australia. There are the usual policies being offered by for-profit insurers. There are for-member policies too called restricted funds and these are offered by not-for-profit insurers. With the latter, you will need to belong to a specific trade or group to be eligible to take out a fund.

Type of Coverage

If you’ve already performed a health insurance comparison online, then you probably already know that there are three coverage types to choose from. If you want to make sure the accommodation costs, theatre fees, as well as a percentage of the doctor’s fees are taken care of should you happen to be admitted as a private patient in a private or public hospital, you might find the private hospital cover relevant.

If, on the other hand, you’d like to frequently access health services provided by dentists, optometrists, physiologists, podiatrists, and even alternative medicine practitioners, obtaining extras or general treatment cover may be helpful.

If however, you’d like to make sure you can access both hospital and general treatment services any time you need it, then considering a combined policy may be worthwhile.

Insurers offer useful add-ons as well. Ambulance cover guarantees 24-hour access to ambulance services wherever you are in Australia. Pharmaceutical cover, meanwhile, ensures that you’ll pay cheaper for specific costly medicines, especially if the ones you frequently require are those that are not listed under the PBS.

Coverage Levels

The coverage levels you choose will determine which services will only be partially covered and which ones won’t be covered at all. Of course, the higher the level you choose for your private health insurance, the lesser the restrictions and exclusions will be.

Most folks obtain quotes online in the hopes of finding cheap health insurance. It’s true the coverage you choose should be something which you can comfortably pay for periodically. But it’s also crucial that the policy you select provides for all the services you will need. This way, should you happen to require them, you won’t have to take care of substantial out of pocket expense. The best way you to find a fund which satisfies these considerations for comprehensive cover and reasonable rates would be through a thorough medical insurance comparison.

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Normal out-of-hours procedures

An out-of-hours GP helpline was set up by the Australian government in July 2011. This is run by Medibank Health Solutions. It offers health advice from a registered nurse. You may then be transferred to a GP if your situation warrants this. This can help you to manage your symptoms at home. If you need to see a doctor, you will be referred to a local out-of-hours service. What if your situation is an emergency? You will then be referred to local emergency services instead.

As of May 2012, all Australians gained access to the out-of-hours GP helpline. ACT, NSW, NT, SA and WA are served directly by the helpline. TAS is served by the GP Assist helpline. In QLD, the helpline is an extension of the 13HEALTH nurses helpline. VIC was the last area to get on board. Their access to the helpline is through NURSE-ON-CALL or the helpline itself.

Health insurance and after hours services

Medibank Private – Medibank Nurse 24/7

This service is similar to an out-of-hours service. Medibank members with hospital cover can call the nurse helpline at any time and speak to a registered nurse. They can offer advice on health issues. If you need to see a doctor, they can arrange an appointment at your local medical centre. There are no home visits with this service.

HCF – My Home Doctor

Did you know that there is an alternative to the normal out-of-hours procedure? This is available if you have health insurance with HCF. Instead of being referred to an out-of-hours service, a GP will visit you at home.

How it works. This service is provided by Family Care Medical Services. They are Australia’s biggest after hours GP home visiting service. After you have spoken to the operator, he or she will arrange for a doctor to visit you if appropriate. This will not be your usual GP. This service is not for emergencies. If you need emergency care, you will be advised of the most suitable option. Assuming that you are a HCF member with eligible cover, there are no extra fees for after hours visits.

Eligibility. You need a valid Medicare card to be eligible. You also need to have HCF hospital cover. Members with extras only cover cannot access this service. Location is also a factor. The service currently covers certain areas of Sydney and SE Queensland. HCF hope to expand the service to other areas in the near future.

Prescriptions. The GP will carry some prescriptions on visits. This includes antibiotics and light pain relief. He or she can write prescriptions for medicines needed urgently. However, some medicines cannot be prescribed on home visits. This includes blood pressure, cardiac, anti-anxiety medicines and contraceptives.

The national out-of-hours helpline is invaluable for getting medical advice when your GP surgery is closed. Need to see a doctor? They can arrange appointments at out-of-hours services. Home visits are an option if you have HCF hospital cover. This may be something that can help you to compare health funds if you are otherwise undecided.

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If you are young and single, please consider these 5 tips before taking out health insurance:

1.   To lock in the lowest rate for life, be sure to start early.  By starting early, you can lock in the lowest health insurance premium rate for as long as you continue to hold hospital cover.  Keep in mind that in order for this to be possible, you will need to take out hospital cover by July 1 following your 31^st birthday.  If you take out health insurance after the age of 30, you’ll be hit with an age loading of 2% for each year you delay.

2.   Take out health insurance and stop paying extra tax.  If you do not currently have health insurance and your yearly salary is $80,000+, you are paying extra tax that you can avoid.  The extra 1% tax you are paying is in the form of the Medicare Levy Surcharge, and if you take out hospital cover, you will not have to pay this tax – as long as you choose an excess that is no more than $500.

3.  Benefit from health insurance even when you are not sick.  In addition to your hospital cover, you take out extras cover.  Extras cover only costs a fraction of hospital cover.  With extras cover you will get great benefits including non-hospital services that you will definitely use, such as physiotherapy, dental, optical and chiropractic.  Some health funds will even offer a gym membership rebate.  These services will help keep you fit and healthy.

4.   Save money on health insurance.  One of the best ways to save money on health insurance is to select a policy that fits your lifestyle.  Most health funds have a policy that is perfect for singles because the policy will only cover the things that are usually needed and will cut out things that are not needed at a young age, such as having a hip joint replaced or cataract surgery.  Choosing a special policy like this will help keep your costs down.

5.   Health insurance will give you peace of mind.  You can feel good knowing that if the worst should ever happen, the procedure will be covered by your health fund.  If the worst should ever happen and you do not currently have health insurance, chances are you will most likely be placed at the end of the long waiting list in the public health care system.  You will also be hit with a huge medical bill.  To avoid this, do a health insurance comparison to find a policy that fits your lifestyle.  As always, the sooner you do this, the better.  And remember, it is always better to have health insurance and not need it than to need it and not have it.

It is very natural for people to want to try and save money on things they do not use every day such as health insurance, especially since the prices of food, mortgages and petrol are on the rise.

When deciding whether or not you need to get health insurance, you need to first figure out if you would be able to afford an expensive operation in an emergency situation.  For example, if you fall down a flight of stairs and your doctor says your leg needs to be operated on, would you be able to afford it?  Even though your condition is not life threatening enough to be treated immediately through the public system, the discomfort you will be feeling will be a daily distraction for you.  If you go to the hospital for this operation without health insurance, it could easily cost you around $10,000.

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Many people believe private health insurance is expensive.  The truth is you can actually get great coverage for a couple dollars a day.  The cost of the leg surgery could have paid for private health insurance for several years, and the surgery would have been covered.

Most families believe health insurance is a necessary expense because it allows them to choose their own physicians, gain quick access to hospitals, and it reduces the costs for necessary extras.

The health insurance requirements are very different for families at different stages in life, and some examples are listed below.

Couples trying to get pregnant

If you are taking out obstetric coverage for the first time, it is very important that you have the coverage a good bit of time before you become pregnant because the waiting period before giving birth is normally 12 months.

Even though obstetric coverage will raise the cost of your health insurance, here are a couple of ways to offset the cost increase:

1.  Take out coverage that excludes the benefits paid for elderly services.
2.  Reduce or remove your “extras” coverage.  This will reduce your premium.

Families with children

If you are not planning to have any additional children, there is really no reason to have obstetric coverage.  Finding health funds that exclude obstetrics could help you save $1,000 each year.  During this stage of your life, you’ll be getting the most value from your extras, especially dental coverage.

Families with teenagers

During this stage of your life, coverage for your children’s braces is important. Having orthodontic work done can be very expensive.  Fortunately, a good health fund will cover about half of the procedure cost.

The following are 5 reasons why you should consider getting health insurance now if you haven’t done so already:

1.  A major emergency could set you back thousands of dollars unless you have health insurance.

2.  When buying health insurance, you are buying peace of mind. Hopefully you will never have to use your health insurance for any unexpected emergencies, but at least you will have it if you ever need it.

3.  You will want to avoid a long waiting period for treatment.  If you have health insurance, the waiting period for elective surgeries are typically shorter than if you don’t have health insurance.  You will also have your choice of a surgeon.

4.  There may be government penalties if you wait too long to get insurance for you and your family.  For example, unless you purchase health insurance before you are 30 years old, you may end up paying more for it in the long run.

5.  You will be able to get extras coverage.  Extras coverage is the one area where you will actually use the services you pay for – such as dental, glasses and chiropractic.

Remember to always look out for hidden costs when you do your health insurance comparison.  Health insurance can come with an excess, and some health funds may even charge a co-payment.

So, can you afford health insurance?  The way I see it, you can’t afford not to have it.