Six tips for managing soaring private health insurance costs.
Will you have to rethink your household budget simply to afford the forthcoming hike in health insurance premiums? If so, you’re not alone. In fact – upon learning that health insurance premiums will increase by an average of 6.2 per cent on 1 April – 50 per cent of Australians admitted that they would have to cut basic household expenses to cover the cost. Around 40 per cent suggested that they would shop around for a new policy.
With premiums for every health fund increasing, now is not the time to be complacent about health insurance costs. Rather, it is the time to be assessing existing policies or shopping around for another to ensure that you’re receiving the best deal. You can’t choose private health insurance based on premium prices alone – you also need to know how you will use that policy, as the potential returns that you receive in claims can save you thousands. For instance, two policies might only have $3 difference between them in their premiums, but one could give back thousands more a year in extras services and claims.
Comparethemarket.com.au recommends that you assess the services which your policy provides – particularly the extras. Until recently, you may have been happy with a more comprehensive policy which affords some ancillary ‘luxury’ services, however, you may now be looking to compare policies and trim the fat off extras you no longer need. Either way, the six tips below will help you to assess and manage your health insurance costs before the annual premium rate rise.
Six tips for managing private health insurance costs:
1. Remember to claim. The cost of your private health insurance overall is a balance between the premium and your potential returns through claims. You must claim to ensure your return on investment, particularly with Extras policies. When making a booking with your healthcare provider, check it offers HICAPS – this gives you an immediate claim. The risk with claiming at a later date is you might forget altogether – which many people do.
2. Know a policy’s returns in potential claims before buying. When speaking with policy holders, it’s often found that most people forget what they’re insured for and what amount they can claim back. For these people, the cost of private healthcare becomes a liability, not a benefit. You cannot buy private health insurance and file it away. When assessing the value of a policy, know the services which you claimed for in the last 12 months, how often you claimed, your spend on health services which you didn’t or couldn’t claim for, and any new services you might want to claim for in the following year.
3. Take advantage of discounts. Some funds will discount premiums by four per cent for direct debit payments, while others will discount by four per cent for annual payments and two per cent for bi-annual payments.
4. Look out for promotions. Some health insurers will offer the first month of cover for free for a limited time, while others may offer vouchers of up to $200 if you refer a new member.
5. Switch and receive a refund from your old policy. Many people don’t know that if they switch suppliers, their old policy will refund any premiums paid in advance. The new policy will start the day after the old policy ceases.
6. Seek extra support when comparing policies. With more than 13,000 health insurance policies available for comparison on comparethemarket.com.au/health-insurance alone, choosing the most suitable policy and knowing how to maximise the benefits can be daunting. Choose a free service which provides a range of customer supports (such as online chat, phone and email support) to help you find the best policy to suit your needs.
Grant Waldeck is spokesperson at Comparethemarket.com.au,which compares more health insurance funds than any other Australian website. Comparethemarket.com.au is a free comparison service hosting more than 100 brands across nine categories – including car insurance, travel, life and health insurance.