Not all health insurers equal

The affordability of various types of insurance is always a hot button issue with consumers but when asked about private health insurance uncertainty as to out-of-pocket costs, there is an even higher concern.

In the wake of the news premiums will rise by an average 5.6% on April 1 the insurer’s industry body says members dropping their cover cite ‘unanticipated medical gaps’ as an even greater concern than the upfront cost itself.

Our Facebook page details dozens of stories about increases from insurers and there’s no doubt people are feeling it. One way to beat the price rise is to prepay your annual premium BEFORE April 1, which will lock in last year’s price.

One of the ironies of insurance generally is that we understandably focus on the headline price of the premium first and then, if at all, focus on the terms and conditions about what’s actually covered and for how much.

In my experience when using your private health cover the gap payments and out-of-pocket expenses are both growing in amount and even more unpredictable in extent. The Australian Medical Association (AMA) went some way to addressing the problem by issuing a report this week that compared cover from various funds and found there were some big differences.

The Private Health Insurance Report Card – the first in a series the AMA plans to release – found HBF paid the most for nine of the 22 procedures.

We’re currently running an offer for FiftyUp Club members for up to $300 cash back from HCF. Click here to see the offer.

Disclosure has improved, with doctors and hospitals forewarning about these unpalatable ‘extras’ and the funds explaining how your cover is subject to excesses and limits but there’s a long way to go.

Most general insurance covers you for the costly and unpredictable bad things in life: crashes, fires, theft etc. If you never claim, you’ve lived a blessed life.

Arguably private health insurance covers you for the costly but often more predictable outcomes of lifestyle and ageing; dodgy joints, faulty ticker etc. 

But however healthy you are or long you live it’s far more likely you’ll make a claim. The experience of too many as to the costs of that claim suggest the system needs much more reform to empower not just consumers but their confidence in the whole idea.