Health Insurance Comparison

If you find the choices of private health insurance bewildering, you’re in good company. Deciding on a private health insurance plan confuses more than half of Australians. To figure out the heath cover that works best for you, a thorough comparison of health insurance policies is necessary.

The Health System in Australia: A Brief Overview

To get you started, we’ve written up a brief summary of the choices you have for health cover when navigating the Australian health system.

Medicare – The public health system

In order to cover all Australian citizens, both private and public health care options are available. Medicare is our public health system, which provides basic care to all Australians. This care includes:

• Treatment in a public hospital as a public patient for free

• Treatment by medical personnel is free or subsidised. (Including doctors and specialists) Specified treatment may be available by participating dentists and optometrists.

• Laboratory tests and other examinations such as X-rays

• Optometrist provided eye testing

Medicare acts as a decent safety net for Australians, however Private health funds provide a vital function in the health care system in Australia, as Medicare does not cover everything.

Health insurance and the private health system

An important part of the delivery of health services in Australia is provided by the private health system. Around 50% of the surgery performed in an operating room, and a third of all hospital beds in Australia are covered by the private health system. Also offered by the private health system are:

• Treatment in both public and private hospitals

• Physio, chiro, and other ancillary services not offered by Medicare

• Your choice of doctor and hospital

• Reduced waiting times

Why should you choose private health insurance?

Insurance offers Australians access to the private health system through private health funds. You can be covered for a variety of services through your health fund by paying a premium. You can be certain you are prepared for an assortment of medical problems that might come up with a private health cover. Benefits of health insurance include:

• Public or private hospital treatment as a private patient

• The ability to choose your hospital or doctor

• Some leeway in the scheduling of elective surgery, and less waiting times

• Accommodation, costs of theatre, and doctors fees are covered

Ancillary (or extras) services may also be covered by private health insurance. Such as:

• Orthodontics, major and general dental care

• Optical

• Physiotherapy

• Chiropractic

• Hearing aids, and glucose monitors

• Naturopathy, acupuncture, remedial massage

A rebate on insurance premiums is offered by the Australian Government to support private health cover. These rebates are on both extras and hospital cover. If you are an Australian with private health cover, you can get up to a 30% rebate. Higher rebates are available for older Australians, 35% for those over 65, and 40% over 70.

What to think about when comparing health insurance

How much are you prepared to pay in premiums? You can reduce the amount you pay up front by considering Excess (the amount you pay for each hospital admission / treatment before benefits are paid out) or Co-payment (the amount you pay, in conjunction with the health insurance provider, for the cost of daily hospitalization) options. Other things to consider: 

• Make sure to read the fine print of any policy that interests you. (gap cover, limited benefits, waiting periods, for example)
• What coverage features do you want? (higher premiums for more benefits may require a trade off)

• List of private hospitals – Make certain if you have a preferred hospital the policy you are considering covers that hospital.
•  12-month benefit periods – Usually, benefit limits are available within a period of 12 months. Some health funds will count the 12-month period from the policy start date, while others use the calendar year.

• Dependent children age limits – Your children are covered as dependents by many health funds until they are 21, you should double check this with each fund though.

Compare the premiums

The price you pay to the health fund for your insurance policy is called the premium. You will obviously pay a higher premium for a more comprehensive policy. Here are some things that may help lower your premium:

• Don’t get a blanket policy that covers items that you will never need

• Reduce the cost of your premiums by using Excess and Co-payment options (especially if a trip to the hospital doesn’t appear to be in your immediate future

• Always consider the Excess and Co-payment choices when evaluating health insurance premiums. If you want to see how different health insurance policies compare, select similar Excess and Co-payment amounts.

Compare the hospital cover level

Think about what hospital cover level you want:

• The highest level of cover will come from a comprehensive plan. Private rooms in a private hospital, (where available) may be included.
• You may only get cover for a public hospital, or fewer benefits in a private hospital, with the more basic plans

Compare health insurance policies that offer similar cover levels. Find out if they all give you private hospital cover. Are the features on all the policies you are evaluating the same? There are exclusions with some policies and some only cover certain procedures. This is one way to lower the premiums.

Compare extra benefits

While dental, optical and physio benefits may be covered by some health insurance policies as an Extras feature, you should find out how much you can claim. One policy might offer $300 for optical, and another $1000. As you can see, there may be quite a difference n maximum benefits. Therefore, make certain of these differences when comparing policies.

In conclusion, it’s very important that you pay attention to the details when you compare health insurance policies. Having a thorough understanding on what waiting period there might be, any restrictions, and the specific cover you’re entitled to under a given policy is crucial for making an informed decision.