Managing health insurance costs

Six tips for managing soaring private health insurance costs.

Managing 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. 





    COMMENTS

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    Nightshade
    11th Mar 2014
    2:37pm
    SORRY -
    BUT I DO NOT BELIEVE THAT MOST PEOPLE IN AUSTRALIA HAVE PRIVATE HEALTH INSURANCE
    SORRY AGAIN -
    BUT ONLY AN IDIOT WOULD BUY INTO THAT SCAM
    The MEDICO in question does the procedure & BULK BILLS it ALL & you slip his reception an envelope with relevant CASH -
    wink wink say no more!
    Nightshade
    11th Mar 2014
    2:38pm
    In my travels I have seen envelopes
    biddi
    11th Mar 2014
    5:23pm
    Simples !!
    btony
    11th Mar 2014
    3:17pm
    Surely you mean 50% of Australians....who have private health cover, which is probably around 5% thereof.
    Health funds are not here for consumers benefit, they're here for investor returns,like all businesses.
    Caveat emptor
    Fossil
    11th Mar 2014
    3:18pm
    How is that better than getting Health Insurance? Nightshade
    I don't get it!!
    Or am I missing the point here?

    In a cronically ill person this would not be practical at all
    Happy cyclist
    11th Mar 2014
    4:38pm
    Does anyone belong to a health fund which they actually like? I have been with NIB for years, I used to think they were okay, but its been clear to me over the last 24 months that the services are being 'squeezed' and now my premium is going up 12 per cent which I think is way over the top. I phoned to complain and the man started "adjusting" it for me, a tweak here a tweak there ... and suddenly I had increased limits for this that and the other with a decreased premium! Sounded too good to be true and of course it was. When I got the confirmation I discovered he had just neglected to tell me one tiny thing .... I would no longer get 75% back on claims but only 60%. Fancy him forgetting to tell me that! When I phoned to complain about that the woman I spoke to could not even pretend to be surprised. I'd say I wasn't the first to (nearly) fall for it!
    If anyone has a health fund they like I would like to hear about it .... thanks.
    granet
    11th Mar 2014
    5:42pm
    I'm as happy as I can be with CUA Health, they do not charge any excess for day surgery and cover the most for optical & dental, was with medibank private before and never got the maximum for glasses, always just a percentage of the maximum for some reason. Also pay now for a year before 1st April and you will get it for current rate, which for us is the equivalent to 12% interst, if I left the same amount in the bank, where can you get 12% at the moment, but not everyone is in the position to do this I realise.
    biddi
    12th Mar 2014
    12:06am
    12 per cent interest in a bank at the moment? Which bank,
    pray tell? Thankyou.
    Happy cyclist
    12th Mar 2014
    2:11pm
    Thanks for the information, I will look into CUA.
    bluey
    12th Mar 2014
    7:03am
    hi how is it that this government can increase health funds premiums by 6.2% yet same mob only increase pension by less than 2% this dont ad up to me as i/we loose again sharfted yet again thanks
    jamesmn
    12th Mar 2014
    12:05pm
    I've been with people care they are good they actually reduced my premium last year but have been advised that they have to increase it from 1st April by$1.80 a month it is non profit and the rebates are higher than other funds don't ever go near I select their adds on tv is what you are paying for I rang them up a couple of years ago and they told me they could not get anywhere near what I am paying james.
    Happy cyclist
    12th Mar 2014
    2:11pm
    thanks for that information. I have not even heard of Peoplecare but will look into them.
    A. N. Onymous
    12th Mar 2014
    5:43pm
    “Grant Waldeck is spokesperson at Comparethemarket.com.au,which compares more health insurance funds than any other Australian website.”

    Untrue. It might compare more than any other COMMERCIAL Australian website, but the Australian Government Private Health Insurance Ombudsman’s site at http://www.privatehealth.gov.au/ covers thirty-six (36) and has a wealth of information.

    The list of funds, being ones registered under the Private Health Insurance Act 2007, is at http://www.privatehealth.gov.au/dynamic/healthfundlist.aspx . It includes open funds and restricted ones [available only to people (and their families) who are current or former members of a specific industry or organisation], profit and not-for-profit funds. There are also links to the funds’ websites.
    Pardelope
    25th Mar 2014
    2:40am
    As with any insurance, it is not only the premiums, excesses, extras, and fine print you have to consider. You really only find out how "good" (or bad) they are when you make a claim.

    In some cases (such as an emergency admission) you may be treated in a public hospital and there is no financial advantage in being a "private patient". The person in the bed next to you (having the same treatment) may receive a large bill afterwards simply because they said they had private cover.

    The main advantages in having private cover (which obviously do not always apply) are to not have to wait in a long public patient queue, to have a choice of doctors (if you think you would prefer someone else), and to (possibly) have a private room. Some public patients do die whilst waiting in queues.

    Another problem is that many doctors charge the fees recommended by the AMA - which is often much higher than the Government recommended fee. You may find yourself considerably out-of-pocket even after Medicare and your private fund have paid out. These doctors generally do both public and private patients, but the private patients are where they make their main income.

    Always get the item numbers from the doctor and check with both Medicare and your private fund before you commit to the procedure.

    Some doctors will negotiate (a lower figure or a payment plan) - if you tell them before the procedure is booked - that you are a pensioner or have other pressing financial difficulties (they prefer to get a smaller amount than have bad debts owing to them).

    Some will transfer you to a public patient waiting list (which may be months long). You then have to decide if this delay is acceptable. Delays in treatment for some things e.g. cancer, may be life-threatening.

    Do not try to negotiate in a crowded waiting room. If they will not reduce their fee, you have the right to seek out another doctor or get a second opinion.


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