Australians are increasingly scrutinizing the value of their private health insurance as premiums rise, with the average increase recently approved at 4.41%. Experts recommend a yearly audit of health insurance needs to ensure coverage aligns with individual circumstances and provides financial benefit.
Evaluating Your Health Insurance Extras
The cost of living is increasing, and with it, premiums and rates across various sectors. Assessing what you’re spending money on, including health insurance, is a prudent step. Significant savings can be achieved by carefully evaluating your needs and comparing options.
Health insurance is a personal matter, and there’s no universal “best” policy. However, a consistent strategy can help individuals determine what works best for their unique life, health, and financial situation. Reassessing health insurance should become an annual task to maximize financial efficiency.
Documenting Usage and Anticipating Needs
While predicting year-round health needs, particularly hospital coverage, can be challenging, tracking regular “extras” usage is a good starting point. Documenting past usage – including frequency, out-of-pocket costs, and rebates received – over several years can establish trends.
Consider anticipated needs for the coming year. If you recently purchased glasses, you may not need optical coverage in the next year. Also, factor in potential future needs, such as pregnancy or treatment for pre-existing conditions, keeping in mind that some extras have wait periods of up to a year.
Auditing Extras Coverage
Review your current extras coverage. If you haven’t used certain extras in the past year, or have used them sparingly, the premiums paid might exceed the potential out-of-pocket costs without insurance. Conversely, frequent usage of an extras service may justify the premium cost after accounting for rebates.
Shopping Around for Better Deals
Once you’ve determined which extras to keep, remove, or add, and assessed your hospital cover needs, it’s time to compare policies. While commercial comparison sites exist, be aware that they often receive commissions from providers, potentially limiting the scope of their comparisons to around 12 providers, despite over 30 health insurance providers and over 100 policies available in Australia.
The government’s private health insurance comparison site offers a completely independent and comprehensive comparison tool, including details of every policy available in Australia. Choice also provides an independent comparison tool, but requires a subscription fee of $29.95 for three months.
Utilizing Preferred Providers
To potentially reduce out-of-pocket costs, consider using your health insurance company’s “preferred provider” network. However, Choice notes that using preferred providers, particularly those operated by the insurer, may impact continuity of care, which may be a concern for those with chronic conditions.
Switching Insurers and Waiting Periods
You have the right to switch hospital cover or insurers without financial loss or restarting waiting periods, provided you maintain the same or a lower level of cover. However, added extras or upgraded conditions will typically require new waiting periods. Some insurers may waive waiting periods when switching, so it’s worth inquiring.
Ultimately, determining the value of your health insurance extras is a personal decision. While unexpected needs may arise, an annual review and comparison process can help ensure you’re paying for the right mix of coverage for your current stage of life.
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