How Do You Get The Best Health Insurance Cover in Australia? Follow These Easy Steps

Step 1: Do you need private insurance? Every Australian is entitled to free treatment in a public hospital. Private health insurance can have the following advantages: more freedom to choose your doctor, shorter waiting times for elective surgery and access to private hospitals.

Step 2: Compare products

A key factor in choosing hospital insurance is which private hospitals a particular fund lets you use. It's also important to check restrictions that apply to the hospital cover you're considering. Some funds restrict the overall cover for extras by combining the maximum limits. For example a fund may offer $400 worth of physiotherapy and chiropractic in a year instead of $400 for each. This restriction can mean very large differences in how much you'll get back.

Step 3: Read the fine print

Before signing up with any fund, read its brochure and key features guide thoroughly. If there's anything about your entitlements that you don't completely understand, write to the insurer and get written answers to your questions before you join. You should include a list of questions to ask when you take out insurance, when you're reviewing it and before you go into hospital.

Beware: Health funds often claim it's easy to switch. But switching can become stressful if things go wrong.

Private health insurance in Australia

Private health insurance premiums are rising in Australia and consumers are finding their policies have hidden exclusions and high gaps. Health insurance premiums are increasing but consumers are getting less for their money. Consumers are being offered products that do not cover common surgical procedures. Consumers are not always covered for what they think they are. Many consumers face unexpected high gap payments when they attend a private hospital. Consumers sometimes face waiting periods if they change funds

Private health insurance premiums here have increased 33% since 2001 even though the Government promised stable premiums when it introduced the 30% rebate and Lifetime health cover.

30% private health insurance rebate

The Commonwealth Government provides a 30% rebate on appropriate private health insurance cover. There are higher rebates for older people: 35% for people aged 65-69 years and 40% for people aged 70 years and over.

Anyone can claim the private health insurance rebate if they are eligible for Medicare and have a complying health insurance policy that provides hospital treatment, general treatment ('ancillary' or 'extras') cover or both.

The rebate can be 30%, 35% or 40% (as applicable) of the actual cost of premiums paid. Therefore, the rebate will increase if there is any increase in the premium.

In other words, you will get at least 30 cents back for every dollar you spend on private health insurance. For example, if your premium is $2,000 a year, you will get at least $600 back. If you are paying $1,000 you will get at least $300 back.

Exclusions

Some new policies exclude a whole range of procedures, such as major eye surgery and heart-related surgery. With exclusions like these it is difficult to see how they will relieve pressure on public hospitals - in fact they might do the exact opposite.

Gap charges

Consumers are facing significant out-of-pocket expenses that are not explained in advance. Recent research by the government showed this to be on average $720 per in-patient procedure. And 21% of people did not know they would be facing gap payments. In addition, 39% of those who faced gap payments also faced a fund excess, averaging $257.

Lifetime Health Cover has been an effective way to encourage healthy younger people to take out private health insurance, but it also traps people in health fund products they no longer want. The only fair and cost-effective mechanism for ensuring equitable health care is the tax system. Any system that does not ensure available resources are used to produce the greatest possible health benefit is ethically unacceptable.

Look out for:

Policies that do not cover common surgical procedures should not be offered.

Informed financial consent where patients are to be charged more than the Medicare and health refund rebate.

Health funds should provide new and potential members with information explaining any exclusions in detail and a separate section in the membership application requiring the member's acknowledgment of the restrictions or exclusions applying to the product.

Some health insurance policies just not worth it. Review your health cover every year, especially if you have a policy with exclusions, limitations, a high excess or a co-payment.

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