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Choosing health insurance in 5 easy steps

young couple on laptop borderConsidering health insurance but not sure how to choose the health cover that's right for you?

We've put five easy tips together to help you choose a health insurance policy that suits you and your family while hopefully saving you a few dollars in the process.

1. Hospital, Extras or both

Health insurance consists of two parts that you can either take out individually or together.

Hospital: This cover helps with hospital costs (accommodation/theatre fees), doctors' fees and medical expenses for procedures that generally require in-hospital treatment, such as joint replacements, cardiac surgery and birth-related services. In order to avoid the Medicare Levy Surcharge, you need to take out Hospital Cover with an Excess no greater than $500 for singles and $1000 for couples/families.

Extras: These are 'ancillary' services provided by recognised professionals, including benefits for optical, dental, physio, remedial massage and more. With Extras cover, you can receive annual benefits for a range of different services.

Many health funds offer combined packages with Hospital and Extras cover, or you can mix and match to tailor a health cover that suits you.

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2. What level of cover do I need?

Private health insurance plans offer different levels of cover to meet a variety of needs. The most comprehensive (highest level) plans would cover you for:

  • choice of private hospital as well as choice of doctor
  • full cover for a large range of hospital services to reduce or eliminate out-of-pocket expenses
  • higher benefit limits for Extras, eg. $2000 for dental benefits as opposed to $500 on a lower plan

The more basic plans would likely cover you for:

  • fewer services (some services may be partially covered, and others not at all) in private hospitals, or a wide range of services covered in a public hospital only, although you will have your choice of doctor within the hospital
  • lower limits for Extras

Obviously, the greater the benefits, the higher the health insurance premium. Only you can decide which plan works best for you. Let moneytime help you choose the level of health cover you want and show you which health insurance policies suit your needs.

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3. What features should I look for?

In both the hospital and extras health insurance categories, you'll find a whole list of features you can get covered for. These features are ones that the Private Health Insurance Ombudsman (PHIO) requires health funds to disclose information on, as to the level of benefits you can claim for them. To figure out which features you want covered, consider your lifestyle:

  • Do you plan to have children soon? Choose a plan with obstetrics.
  • Do you have a family history of heart problems? Choose a plan with cardiac cover.
  • Do you need glasses or contact lenses? Choose a plan with optical cover.

Look at your lifestyle and decide which features are most important to you. A quick health check with your GP might also reveal features you should consider for private health insurance, then simply choose the cover that gives you the most benefit for the features you need.

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4. Excess, Co-payment or neither

Excess and Co-payment options offer you cheaper health insurance premiums by agreeing to pay an out-of-pocket sum when you are admitted to hospital.

An Excess is a single sum paid when you are admitted to hospital, while Co-payments are spread over each night or day that you spend in hospital, rather than an up-front amount.

These options are an ideal way to reduce your premium if you don't expect to go to hospital in the near future, but still want to retain Hospital Cover 'just in case' or to avoid the Medicare Levy Surcharge.

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5. Use a comparison site

Why research the hard way when it's all been done for you? Comparison sites help you compare your options at a glance by showing you what's available in the market and what products suit your circumstances. For detailed information presented in an easy-to-read table, start comparing health insurance with moneytime.com.au. moneytime shows you what features are covered, the benefit limits of each plan and what health insurance jargon actually means, so you can understand what you get for your money and make a decision that's right for you. It's ultra easy to use – start comparing health insurance plans today.

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