Time to read : 5 Minutes
Time is ticking before the annual health insurance premium hike comes in for another year. If you haven’t shopped around yet, it’s not too late. Here’s everything you should know to help you find a good health insurance policy.
Every year, over hundreds of thousands of Aussies switch health insurance. It's usually to beat the annual premium increase and to get a better policy. But what does good actually look like? Here's how to get the best of both worlds: a policy that costs less but gives you more.
Before we get started, note that the term ‘good’ is different for everybody. But our tips and tricks can help you hone in on a good value policy for you.
Look for value for money
This may sound obvious, but it’s worth digging into what you’re actually getting in your policy and if it looks good when put up against another similar policy.
A quick word of warning: the health funds don’t make this particularly easy to figure out if policies are like for like. So if this sounds like a bit of a drag, you can stop reading and get in touch with one of the expert health insurance team members at Compare Club.
It can take as little as 15 minutes to find the right cover and our team manage all aspects of the switch including the paperwork.
Still want to get under the skin of your health cover? Here’s a few pointers to know what to look for:
Look at “Plus” policies when it comes to hospital cover. Insurers have a bit more leeway as to what’s in this level of cover and they’ll often tailor these to certain life stages. For example, one Silver Plus policy might have cataracts and joint replacements but no pregnancy cover, while another Silver Plus from the same insurer will have the opposite.
Do you get a fixed amount back on your extras or a percentage of the cost? If you’re on a fixed amount, that won’t go up as the cost of treatment increases, whereas a percentage will. So the longer you’ve held your extras cover, the less value you’re actually getting back over time with a fixed amount. Keep in mind a fixed amount may work out as better value in year one – this is definitely something to chat to one of the Compare Club team about.
Are you over-insured on your extras? It’s one thing to pay for high annual limits. It’s another thing entirely to actually use them. If you can smash through your allocated extras rebates over the course of the year, you’re going a long way to offset the cost of the policy. If you don’t even come close to touching those limits, you can probably save money by looking for a lower value policy.
Quick money saving tips
Ok, here are four tips to knock money off your premium.
Tip 1: consider increasing your excess – the amount you’ll pay if you need to be treated in hospital – to reduce your premiums. $750 is typically the highest amount. The only catch here is that if you need to go to hospital for a procedure, you will need to pay that out-of-pocket. So it’s up to you to weigh up if that’s good value or not.
Tip 2: when switching policies – if financially doable – consider paying your premiums upfront for the year. Not everybody has a spare few thousand lying around, but if you do, most insurers charge less if you pay annually instead of monthly.
Tip 3: switch before 1 April. If you’ve locked in your policy in advance and are comfortable paying a higher excess, there’s typically several hundred dollars worth of savings to be had, as you’ll be locked into the lower amount for 12 months, effectively dodging the year’s price hike.
Tip 4: look for a fund that’s offering 6 weeks free if you switch. This shouldn’t be the main reason to move to this insurer, but if it’s a good policy that’s right for you, then you’ve just saved yourself several hundred dollars in monthly premium.
Combining these strategies can save you serious money, especially if you’re lucky enough not to need hospital services during the year you’ve paid in advance.
This may not be for everyone, but just switching alone could save you in the region of $294, even if you can’t pay in advance and aren’t willing to lower your excess.
Health insurance tailored to you
Sadly, you can’t exactly adopt a pick’n’mix approach to your health cover, much as we’d love to see this. Some insurers do give you some flexibility with your extras, but in general, when it comes to finding a good policy, be selfish and put you first.
Not sure how to do this? Here’s some of the questions our health insurance specialists at Compare Club ask Aussies every day to help them find a policy that matches what they need:
What are you likely to need in 12 months’ time? Maybe your kid needs braces or you need joint surgery. This is important so you can serve your waiting periods.
Have you got a family history of conditions like cancer or heart disease? That’s useful to consider when looking at levels of hospital cover, even if you’re currently fit and healthy.
Will you really use your extras? This is where you need to weigh up if you’re adding an item for a “just in case” scenario or you genuinely think you’ll use it. This way you can work out if you’re getting good value from the policy.
These kinds of questions help the specialists at Compare Club hone in on recommended policies that match what you need. It can be a lot quicker and easier than trying to do this yourself.
Be aware: one misconception our experts often debunk is that the top tier is the best. In reality, very few people will get value for money with a Gold hospital cover. For most Aussies a Silver Plus or Silver policy could be a better option.
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Consider the hospital network
So you found a good value health plan. The next thing to check is that the health fund has agreements with a range of private hospitals, especially if you live in a capital city. If you live in a regional area your options will be somewhat limited but it’s worth finding out what they are or how far you may need to travel.
These agreements are important to your bottom line because they allow you to access high-quality health care without paying huge out-of-pocket costs. A health fund with a strong local hospital network gives you flexibility so you can choose your hospital and specialist.
Let’s say you choose to go private with birthing and you have a particular obstetrician in mind, they are likely to deliver babies at only a couple of private hospitals. So you would check if the hospital your chosen obstetrician works at is part of your fund’s network.
Look at the GAP cover arrangements
A health insurance gap is the difference between what Medicare along with your health fund pays and what your hospital or doctor changes. The gap is the amount you’d be out-of-pocket for.
The Medicare Benefits Schedule (MBS) determines what the government has set as fees, from consultations to tests and treatments. And this is the amount you would get back from Medicare. But doctors often charge well above these fees, which is where your health fund could step in.
Yes, but… health funds also have limits as to what they will pay after the MBS amount. They could pay all of the difference or just a portion of it – which means you’d need to pay the gap.
For this reason, it makes sense to find out what your health funds’ gap cover arrangement is with participating practices or practitioners – especially for services you may use regularly. It’s a clever way to minimise your out-of-pocket medical expenses.
Some funds offer No Gap or Known Gap policies. They don’t totally eliminate gap fees, but they can be valuable if you know you need surgery.
What about the claims process?
The final piece to what makes health insurance good is what the claims process is like. Paperwork and red tape is the last thing you need to be bogged down with when you’re trying to put in a claim.
Ultimately you’d want it to be a seamless experience and have your claim paid fast.
Here are some considerations:
If you like to talk to people: ask about their call centre hours.
If you like to self-serve: find out if you can do it online or via an app.
If you prefer face-to-face: enquire if there are any branches.
And the very important question: how long it takes to have a claim paid?
Bottom line
If you’re ready to beat the premium price hike, now’s the time to review your health cover.
Remember to look for value for money and a plan that will provide the right type of cover for your life stage.
Also consider whether the health fund has a strong private hospital network to help reduce out-of-pocket costs as well as gap cover arrangements.
Need a helping hand? Let our experts do the hard work and find the right health insurance plan for you.
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Disclaimer:
Any health or financial advice is general in nature and does not take into consideration your circumstances. Always check with a financial or health professional before making any decisions.
