Every month when I see the payment for my private health insurance come out of my account I wonder if I am getting value for money.
On the 1st of April another price rise will hit our health insurance premiums (the 2nd in 6 months) so now is the time to check if you are getting the best value for money or even do you need extras insurance?
Extras health insurance is not like other insurance products so it is worth taking a closer look at it.
HOSPITAL HEALTH INSURANCE
Hospital Health Insurance will cover any inpatient visit to a private hospital. Hospital cover will allow you to get surgery without needing to wait on a public waiting list, or in the case of an emergency be treated straight away, only needing to pay your agreed excess.
Hospital cover reduces or eliminates the medicare levy, lowering income tax for some people.
If you need to claim your hospital insurance you are out of pocket an agreed amount (your excess) and your health insurer will cover the rest of your hospital bill.
This is how insurance is meant to work - you insure yourself to cover a large cost in case anything happens, just like you do with your car or house insurance.
EXTRAS HEALTH INSURANCE
Extras Health Insurance covers out of hospital health expenses such as Dental, Optical, Physiotherapy.
The big difference with this type of insurance is that the health insurers will pay up to a set limit for the treatment that you need and then you pay the rest (the gap). They very often leave you with a large gap payment, only covering their small agreed amount.
For this reason extra's insurance can be a budgeting tool used to save money for your overall health costs. It is not true insurance, where the risk of needing to make a payout is with the insurer.
If you are to have a catastrophic injury involving your whole mouth, even the top level of extra's insurance will only cover a tiny part of the cost of the repair.
The trick is to pay less in insurance premiums than you get back as benefits.
HOW DO YOU CHECK IF YOUR EXTRAS ARE A RIP OFF?
1. To work this out you need to request a copy of your claims statement from your health fund for the last year and compare what benefits they have paid compared to the premium that you have paid for the year.
2. If your premium is substantially higher than the benefits paid out and you do not anticipate your health needs changing soon, consider switching to a less expensive policy or cancelling your extra's policy all together.
TOP TIP The money that you are paying to your extra's policy can be kept in a separate bank account to spend on the health expenses that you actually have without the restrictions made by your health insurer.
THINGS TO KNOW ABOUT EXTRAS INSURANCE
Your Extra's policy does not need to be with the same health fund as your Hospital Policy
There are no tax implications of not having Extras Insurance
Extra's Insurance will have an annual limit of how much an insurer will pay each year.
Any money not spent in a previous year DOES NOT roll over to the next year, Use it or lose it!
Insurance companies limit the number of treatments they will pay for based on their commercial interests not YOUR HEALTH requirements.
Who knows what is best for your health? Your health insurer, or your Dentist and YOU?
FIND A BETTER OPTION
The best option for Extra's Insurance is to keep your money in a separate bank account to be used only for the healthcare that you need - you choose what you want to spend it on and with the health care provider of your choice not those chosen by your health insurer.
If you prefer to still use Extra's insurance then find an insurer that is 'not for profit'. Not for profit Health Insurers are not generating a profit for their share holders or parent company, so all profits are paid out as either bigger payout on treatments or lower premiums.
To help you see how your health insurance company is performing we collated all the health insurer payouts last month for a 6 monthly routine checkup and these are the payouts that they all made on a $55 treatment.
AHM APIA Australian Unity Bupa CBHS CUA Defence Health Doctors Health Frank GU Health HBF HCF Latrobe Lysacht Medibank Private Mutual Community Mutual Health Naval Health NIB Police Health Teachers Union
NOTE: From the above payout list that the smallest payouts are the 'for profit' insurers (Bupa & Medibank)
NOT FOR PROFIT HEALTH FUNDS
Some Not for Profit health Funds require you to meet certain criteria to join. They include: ACA, CBHS, Defence Health, Doctors' health Fund, Emergency Services Health, Navy Health, Nurses & Midwives Health, Police Health, Reserve bank Health Society, RT health, Teachers Health, TUH and UniHealth.
If you are after a not for Profit Health Insurer that anyone can join then look at: Australian Unity, Frank Health Insurance, GMHBA, HBF, HCF, Health Care Insurance, Health Partners, HIF, Hunter Health, Latrobe, Mildura health Fund, Peoplecare, Phoenix Health Fund, Queensland Country Health, St Lukes and Westfund
To get a comparison of the Health Insurers available checkout www.privatehealth.gov.au This is an Australian Government run website to the information is not influenced by any commercial agreements.
Give us a call if you think you have any questions or would like to arrange an appointment 3378 0033