Finding the right private health insurance policy from the right insurance company can be overwhelming for a first time buyer. We are overloaded with numerous advertisements from various independent health insurance companies from print and non-print media, leaving us even more confused than ever. The wide options offered, however, can be advantageous to us since we, as consumers, are in control of selecting the best policy for our needs. The range of services covered by a policy can vary with each fund, as can their terms and conditions.
There are generally eight factors to take in to consideration before choosing a policy.
Before you do a research on the different health insurance policies, you need to know what you want covered that is not already covered in Medicare. Do you need major dental care? Are you a die-hard follower of natural therapies? Depending on your marital status or age, do you need a more comprehensive cover like antenatal and postnatal care or home nursing?
The guidelines below will help you decide on the best health insurance for yourself or your family:
Use a comparison site
The age of technology has made it easier for us to compare different insurance sites in an easy-to-read table with a few clicks of a button. Comparison sites help you compare the options available at a glance by featuring what types of insurance policies are available in the market and which ones suit your circumstances.
You can often cut policy costs by removing irrelevant features and customising your policy. Before doing this, you need to work out what life stage you are currently at.If you are in your fifties, you may not need birth cover or if you have dependent children in their 20s, look for cover that includes children up to age 25, instead of the standard 21. Using such sites costs you nothing because they are paid by the participating funds. Such sites are useful in helping you make a decision on which insurer to purchase from by narrowing down the options available based on your selection of features you want covered in your policy.
The level of cover
Private health insurance plans offer different levels of cover to meet a variety of needs. The most comprehensive (highest level) plans would cover you for:
- choice of private hospital as well as choice of doctor
- full cover for a large range of hospital services to reduce or eliminate out-of-pocket expenses
- higher benefit limits for extras, eg. $2000 for dental benefits as opposed to $500 on a lower plan
The more basic plans would likely cover you for:
- fewer services (some services may be partially covered, and others not at all) in private hospitals, or a wide range of services covered in a public hospital only, although you will have your choice of doctor within the hospital
- lower limits for extras
Obviously, the greater the benefits are, the higher the health insurance premium. Only you can decide which plan works best for you.
How relevant are the features in a policy?
When determining a policy to subscribe to, a person has to consider the lifestyle he or she leads and his/her medical history. For instance, a person or couple who intend to have children should go with a plan that includes obstetrics cover, whereas cardiac or optical cover is relevant to those with a history of heart or optical problems.
Also, based on your circumstances and medical history, you can choose to opt for just hospital cover or both the former and the extras. Hospital cover helps with hospital costs (accommodation/theatre fees), doctors’ fees and medical expenses for procedures that generally require in-hospital treatment, such as joint replacements, cardiac surgery and birth-related services. In order to avoid the Medicare Levy Charge you need to take out Hospital Cover with an excess no greater than $500 for singles and $1000 for couples/families.
Determining the features most applicable to you can be as easy as getting a quick medical examination from a general practitioner. This helps you to decide what features to opt for in both or either the Hospital or Extras cover.
Excess, Co-payment or neither
Excess and Co-payment offers you cheaper health insurance premiums by having you agree to pay an out-of-pocket sum when you are admitted to hospital. An Excess is a single sum paid when you are admitted to hospital, while Co-payments are spread over each night or day that you spend in hospital, rather than an up-front amount. Higher excess can mean lower premiums while little or no excess may translate in to higher premiums.
These options are an ideal way to reduce your premium if you don’t expect to go to hospital in the near future, but still want to retain Hospital Cover ‘just in case’ or to avoid the Medicare Levy Charges.
Mix, Match & Review
You don’t need to have both hospital and extras cover with the same insurer. Often you can get a better deal on extras with a different provider. Choosing the right extras cover can make a huge difference in your out of pocket expenses. It’s also vital to review whether your policy is competitive in the market.
The Waiting Period
The waiting period signifies the span of time between a person signing up for a policy and the time they are finally eligible to claim benefits. The waiting periods for most funds are:
- Standard extras: 2 months
- Optical: 6 months
- Preexisting ailments/conditions, major dental: 12 months
If one or more of these conditions are relevant to a consumer, he or she might want to consider a policy with a shorter waiting period. Some funds may also waive the waiting period during promotions, which is worth considering when deciding on a health insurance policy.
Aside from lower premiums in place of higher excess payments, or higher premiums in exchange for shorter waiting periods, a person might consider purchasing a policy from a fund that appreciates customer loyalty.
Many people would welcome premium discounts based on the number of years a person has subscribed to a particular fund, instead of premiums that automatically go up year after year.
On the other hand, a person might want to purchase a different fund when his or her policy is up for annual renewal. Some funds offer attractive bonuses, discounts or deals to consumers who join or switch from another fund.
Check Your Policy’s ‘Health’ on a Regular Basis
It doesn’t end there once you have purchased your policy. All policies are prone for renewal, and that is the time a subscriber should review whether it still meets his or her healthcare requirements. High premiums and low benefits are reasons to switch funds, but you should ensure that it doesn’t compromise your healthcare needs.
There is no ‘one size fits all’ policy. The premium for policies varies with a person’s healthcare requirements. If you are considering purchasing a private health insurance, you should take into account the government’s health insurance rebate and whether you are subject to health cover loading. On a final note, remember to read the fine print carefully to ensure that all your healthcare needs are met.