There are some things you can do about making private health insurance work better for you

It’s worth having an open mind about Private Health Insurance (PHI) because far too many people end up paying too much for policies which can leave them feeling a bit sick..

If  you don’t want to be one of the disappointed here are a few thoughts which might save time, worry and even money.

We can’t do much about the above inflation increases year-on-year. On average policies went up by 6.2% on April 1 and that’s a very average figure. Some premiums soared by almost 17%.

You also have to suck it up if you’ve been means-tested out of the 30% rebate which already costs some $6 billion annually. The government wants to re-instate it but won’t say when.

And the various sticks and carrots to make young and old take up and stay in PHI and prop up the system, such as the Medicare Levy and Lifetime Health Cover, aren’t going anywhere very soon.

But what you can do is use the government’s independent information and comparison tools such as  www.privatehealth.gov.au  to get a commercially unbiased view of your options. It’s a great start.

If you don’t want, don’t like or can’t afford PHI there can be costs, which if you are younger add up over time, but there’s no obligation to take it out.

PHI is different from the kind of cover you might get for your home and car in many ways. It’s more complex, more regulated, more expensive but less focused on how good or bad a risk you are.

In some ways the lack of risk-based pricing is the key difference with general insurance which may benefit many of the over-50s reading this.

Thanks to a policy called community rating the premiums we pay for our health cover as older Australians are the same as those paid by any other customer—regardless of their age of health status. There’s no discrimination.

The health funds don’t advertise it but they seek more younger clients to offset the generally, and note this applies to averages not individuals, higher payouts to older customers as we begin to frankly wear out.

Of course there are plenty of those in their sixties who could run rings round far less fit generations but as we get on we tend to need more procedures and they tend to cost more.

So for us there’s an advantage for being in the system if you can afford it. But how to find the value? Around 10% of PHI customers or one million people switch funds each year trying to get just that.

Many are frustrated to find the cover they thought they had,  to say a knee replacement,  was actually an exclusion or not covered. There’s almost 50,000 different policy variations out there which is bewildering.

Also as the costs go up those too focused on the price as opposed to the value they might get chase lower-priced premiums by downgrading  their cover.

There’s been an explosion in what are called exclusionary or  restrictive PHI products recently to cater for this demand .

It’s the simplest way to save but while it makes sense to drop maternity services if you are of pension age many more have made poor decisions.

A recent survey suggested 39% of respondents  automatically renewed their PHI every year probably without reviewing it to see if the cover was still right for them and their families or if they could find a better deal with another provider.

At the very least you should check out the policy when the renewal notice arrives to see how it fits and also and look into a number of commercial comparison sites , as well as www.privatehealth.gov.au,  to see if there are better offers out there.

You may be surprised, in a nice way.