5 Steps to see if you can save on Health Insurance
Comparing health Insurance policies is not as complicated as it may seem. Many of us fear losing something if we move, but if we’re not prepared to shop around, insurers could be taking advantage of our loyalty.
It’s worth taking a few moments to find the cover which suits your needs best, even if you don’t ever use it. The premiums might be less, for starters, and you may be paying for something you no longer need. But beware some prices are quoted inclusive of the 30% government rebate which most, but by no means all, consumers get. Don’t mix up rebate and non-rebate prices.
Here’s a simple five-step checklist to help you compare.
The good news is, this is a very regulated area and the government wants more consumers to make better decisions around cover. So they make it easier to switch by encouraging what’s called “portability”.
For example, a new fund will recognise all hospital waiting periods you’ve served (if the level of hospital cover is the same) and most extra waiting periods you’ve served. However, if you’ve traded up for extra benefits or better conditions, such as cover for certain procedures, you may have to wait.
Use the help which is freely available such as the independent government website www.privatehealth.gov.au.
Step 1
Get the standard information sheet (SIS) for your current policy. This should be sent to you at least once a year but is freely available from your current insurer online – or ask for one over the phone.
It will list the insurer, the product you have, who is covered, and the monthly premium with and without any government rebate. It also tells you if there is an excess on the policy – that is, the amount you pay first before you can claim back any money.
Step 2
Get the SIS for the policy you want to compare.
Step 3
First, compare the hospital cover. The SIS clearly lists what is covered and what is not, and what is only covered to a limited extent.
You can also check if there will be any out-of-pocket-expenses for a hospital visit, such as excesses, co-payments or gap payments (see notes for definitions).
Step 4
Next, weigh up the general or extras cover, which includes dental and optical treatments. The SIS tells you about any excess on the policy and about any deals your fund has with referred service providers which can save you money.
The services covered should be listed with the relevant waiting periods. There’s also info about the benefit limits of the amounts you can claim per 12 months for any service. Some services, such as orthodontics, might have a lifetime limit. Others, such as acupuncture, naturopathy and remedial massage, may have a combined limit.
There will also be examples of maximum benefits payable – i.e. how much the fund will pay up towards particular dental services or with chiropractors.
Step 5
Decide! You may choose to stay put, or switch, or even ask your existing provider for a better deal to retain your custom. Consider the costs you pay and the services you might use.
You may know if you’re planning to have more children. You may not know when your knee is going to go bung. How much is it worth to you to offset that risk? Everyone has their own answer.
Anyone can lower their premiums by blowing out the excesses and even the exclusions, but some experts in the industry recommend you don’t trade away whole areas of cover.
The Good News
Many consumers are not aware of the so-called “portability” rules, which make it easier and safer to switch.
The Private Health Insurance Ombudsman calls this “The Right To Change” your insurance if it no longer meets your needs.
In essence, if you move products within a fund, or between funds, the law says there cannot be any new “waiting periods” if the level of hospital cover is the same. (However, if you’ve traded up for extra benefits or better conditions, such as cover for certain procedures, you may have to wait.)
If you are changing your extras cover too, most funds do not require you to reserve waiting periods – but in the case of extras, this is up to the individual fund, so you should check with any new insurer about benefits and annual limits.
Another thing to consider is loyalty bonuses, which can mean higher annual limits on some extras, such as orthodontics, or a cut in your hospital excess.
There is no universal rule for these. So if you have one, work out how much it might be worth and then ask if your new fund will honour it.
