It’s hitting the headlines and has most of us considering future costs with some trepidation.
It’s the cost of living item that never seems to go down and, rather, seems to be accelerating at an alarming pace.
Once utilities are paid and fuel and groceries covered, one of many Australians’ biggest expenses is health insurance and Medibank, Bupa, HCF and NIB are set to increase their premiums on 1 November. However with a little bit of tweaking, it’s an area where savings can be easily made.
Consumer advocate CHOICE warns that of the 11.5 million Australians covered for hospital treatment, more than one in three has bought the most expensive, maximum level of cover with no exclusions.
A CHOICE analysis of current policies found that downgrading from a gold policy to silver or silver plus could save a single person up to $1823 per year with the same provider – or more if you shop around
First a quick explainer. If you just want to avoid paying more tax and are not concerned about any future health issues, you can choose basic cover. Beyond that, there are three tiers of health coverage, bronze, silver and gold.
Naturally gold is the top tier and covers a wide range of services from IVF to appendix surgery.
Like all insurance coverage, how much you pay depends on which state you live in, the policy, your level of excess and when you bought the policy.
Silver policies cover 26 silver level services and silver plus has one or two gold level services. So you could buy a silver policy but add on an extra suited to your circumstances, such as rehabilitation in a private hospital or dialysis.
Bronze is a practical way to protect yourself against everyday uncertainties, such as broken bones, basic surgery and skin-related procedures. Once again, you can buy one or more extra services for an extra price.
When looking at what’s offered at gold level, it’s clear there are savings to be made by stepping back to silver.
“With the cost of living rising, it’s vital that people check they’re only paying for what they actually need when it comes to health insurance,” says CHOICE health insurance expert Uta Mihm. “Gold policies can cost almost twice as much as cheaper policies that still cover many things people need.
“In most cases, the only people who are getting the best deal from being on a gold policy are those who have a chronic illness, need pregnancy and birth services, psychiatric treatment in hospital, or weight loss surgery. That leaves many paying more than they need for their health cover.”
And of course, if you want to take out higher coverage because of a health issue, new policies almost certainly will not cover you for any existing condition, so it’s kind of wasted in that instance.
Ms Mihm says: “For many people, a silver plus policy that includes cover for rehabilitation in a private hospital is a very good option and will offer you better value than a gold policy.
“People should also downgrade if they needed higher-level cover in the past but don’t anymore. A common situation is buying coverage to have a baby in a private hospital or to cover surgery, but then continuing to pay once their situation has changed.”
Have you shopped around for health insurance? Did you save any money? Why not share your tips in the comments section below?