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Why These Health Insurance Myths Could Blow Your Budget

Jonathan October 19th, 2016 0 comments

Health insurance can be a confusing business, and many people don’t have a great handle on how it really works.

If this applies to you, you may find yourself falling for some of the myths and misconceptions that many people believe about health insurance. This can be a big mistake as far as your budget is concerned and can lead to out of pocket costs that you weren’t expecting and haven’t prepared for.

Here are some of the most common health insurance myths you need to avoid and what you can do to stop them ruining your budget.

Myth #1 – Medicare Is All You Need

One of the biggest myths about health insurance is that you don’t actually need it because of Medicare.

Medicare is mostly limited to free public hospital treatment and subsidised treatment as a private patient and for access to health professionals such as doctors and specialists.

Beyond this, there is a lot that Medicare doesn’t cover. Out of hospital services such as dental, optical, physiotherapy, chiro, osteo, podiatry and alternative therapies are one of the most important things to think about as it can lead to out of pocket costs if your family needs to access them but don’t have Extras health cover to help with the costs.

What to do: Think about the services that aren’t covered by Medicare and how likely it is that your family will need to use them. If you know that non Medicare services are going to be important for you, use a comparison service like to shop around for Extras cover that suits your family’s needs and budget.

Myth #2 – I’ve Got Cover So I Don’t Need to Think About It Any Further

Hopefully the cover that you already have was a great fit for your family when you bought it but it won’t necessarily be the best option right now or a bit further down the line.

Your health needs change as you get older, and your cover needs to be reviewed regularly to reflect this. This means you can adjust your cover so it includes services you need as your family grows up (e.g. optical and orthodontics) and give you the chance to drop any that are surplus to requirements (e.g. obstetrics).

Empty nesters whose children have left home are one of the groups that could gain the most from reviewing their cover. At this stage of your life, you may have no need for the services that were a priority when you were younger and at the same time, you’re probably not covered for ones that will benefit you as you get older.

What to do: Review your policy at least once a year to see how you can make it more cost effective and think about the things that are likely to become important for your family over the next 12 months so you don’t fall foul of waiting periods.

Myth #3 – Once I Choose a Health Fund, I’m Stuck With Them

Here’s another big misunderstanding about health insurance: the fear of being tied to a health fund once you buy a policy with them.

In reality, there’s no contract involved and you can switch health funds whenever you want. People often assume that it’s a complicated process but it’s actually pretty simple.

Even better, “portability” rules mean that you’re not required to serve waiting periods again if you’re switching to a policy that’s more or less the same as your existing one (or one that has slightly lesser cover). You’ll only need to think about waiting periods if you’re taking out broader cover with your new health fund and haven’t served them already with your previous fund.

What to do: When you’re reviewing your cover, don’t be afraid to shop around and see what kind of value for money you can get with other health funds. Here at, you can get quotes quickly and easily from a range of health funds.

Myth #4 – Having Hospital Cover Means You’ll Never Pay If You Go to Hospital

Even if you have Hospital cover, it doesn’t mean that you won’t have to pay anything towards your hospital stay. Many people assume that it covers everything relating to an admission and are blindsided when they’re hit with out of pocket costs that weren’t even vaguely on their radar.

A “medical gap” can happen if a doctor charges above the Medicare Benefits Schedule (MBS) and depending on your policy, health insurance can help to cover some or all of this.

What to do: Check the small print on your policy to see how much (if any) of a medical gap your health fund is prepared to pay. If you’re not happy, you might think about switching health funds if you find a policy that meets your needs and budget.

Confused about any aspect of health insurance? Don’t make these kind of mistakes because you’re not quite sure how it all works! Our expert advisers are here to help you to make informed choices so you can make the most of your budget and find the best cover for your situation.

Over to you … have you ever made any big mistakes with your health insurance because you believed some of the big myths about it?

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Confused? Not sure if this applies to your situation? Phone us on 1300 643 355 for some free, no obligation advice!

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