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The Dos and Don’ts of Private Health Insurance

Jonathan September 8th, 2016 0 comments

Let’s face it, health insurance can be hard to get your head around, and it’s this confusion that means that many Australians don’t have the right kind of cover or don’t buy it at all. That’s why we’ve put this post together to help you to negotiate the things you should do when it comes to health insurance – and the mistakes that can cost you.

Don’t: Buy a Policy That is Too Basic

Many young and healthy people feel they only need very basic cover as they don’t see themselves going to hospital anytime soon. Throw in the fact that you only need a basic Hospital policy to avoid the Medicare Levy Surcharge, and you can see why many people have cover that doesn’t actually offer them much protection. These are known as “junk” policies and can lead to big out-of-pocket costs if you need treatment that isn’t included on them.

Don’t: Forget About the Annual Premium Increases

Health funds up their premiums year-on-year and the rises have been steep in recent times. The increases always happen on April 1st so you have chance to prepare yourself before they hit by shopping around to find a good deal and pre-paying at that rate for 12 months to “lock in” before it goes up.

Don’t: Struggle in Silence

Confused about a specific aspect of health insurance? Our advisors are here to help! We can help you to make sense of things so that you don’t make a bad decision that leaves you paying over the odds.

Do: Act Before You’re 31

It’s cheaper to take out health insurance before your base date – July 1st after your 31st birthday. If you buy health insurance after this, Lifetime Health Cover  (LHC) loading fees come into play and this adds 2 per cent to your premiums for every year that you delayed (up to a maximum loading of 70 per cent).

Do: See If It’s More Cost Effective to Buy Cover

Depending on your income, the Medicare Levy Surcharge (MLS) can mean that it’s actually cheaper to buy Hospital cover rather than pay the MLS for not having it.

For singles, the MLS kicks in if you earn at least $90,001 and for families/couples, it’s $180, 001. You could by from 1 to 1.5 per cent, depending on which income tier you fall into. Many higher earners find it more cost effective to buy eligible Hospital cover than pay the MLS.

Do: Be Honest About Your Health

Always tell your health fund about any pre-existing medical conditions, even if these haven’t been officially diagnosed. It’s likely that you’ll have to wait up to 12 months until your health fund will cover hospital treatment relating to the condition but if you keep quiet, you may not be covered at all. This will leave you needing to pay out-of-pocket so always best to be upfront!

Do: Compare Health Cover Regularly

Before you take out a particular policy, it’s worth shopping around and comparing other policies to see if you could get a better deal elsewhere on the same type of cover. In a lot of cases, you can get equivalent cover for less or sometimes even superior cover for the same price just by switching health funds.

If you’re put off the idea of shopping around because you think it’s takes too much time and effort, let us do it for you. At, we compare quotes for a range of health funds to help you see how far your budget could go.

Still have questions? Let's talk!

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