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About Private Health Insurance
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What do I need to know about Private Health Insurance
Choosing isn't difficult at Moneytime
Private Health Insurance is all about security. It can help cover the costs of events that come as a surprise, such as breaking a leg while skiing. Or those you may expect, such as having to renew your spectacles or visit the dentist.
Private Health Insurers give you the ability to choose the level of cover most relevant to your age, lifestyle and circumstances, to cover you for almost any health incident. Currently there are also financial benefits to joining a Private Health Fund, as holding hospital cover (with an excess no greater than $500 for a single and $1000 for a couple or a family) exempts a taxpayer from the Medicare Levy Surcharge.
So how do you choose which cover to take out from amongst the many policies in the market?
Moneytime makes it easy. Simply choose the policy features you want from your cover, and our fast, efficient comparison engine does the rest. Sifting through the available options from a range of leading Health Funds, we give you all the information you need to find the cover that's right for you.
The Funds that Moneytime represents
Moneytime currently represents a number of Private Health Funds, including (in alphabetical order) AHM, Australian Unity, BUPA (HBA and Mutual Community), HCF and Manchester Unity.
Private Health Insurance, and why you need it
Private Health Insurance provides medical protection for yourself and your family, and depending on the level of cover you choose, it can allow you to make your own choice of doctor, hospital and type of room for hospital treatment. You may generally have more choice about the timing of your treatment and also wait shorter periods for some forms of elective (not immediately life-threatening) surgery.
The alternative is the Medicare public system, which covers you for treatment as a public patient in a public hospital, under a doctor selected by the hospital and subject to their availability. If your situation is not life-threatening, you may have to wait longer than is convenient for your treatment.
Attending hospital as a private patient can allow you to choose the specialist who will treat you, and give greater freedom in scheduling, but without Private Health Insurance, this would be a very expensive option. With Private Health Insurance, you not only have the opportunity to tailor your cover to suit your lifestyle, you can also include non-Medicare components such as dental work, physiotherapy, spectacles and contact lenses, chiropractors, podiatry and many other categories of healthcare.
What the Health Funds offer
As with any insurance policy, there are different levels of cover for which different levels of premiums apply. The Health Funds offer many variations that effectively balance the amount you pay against the range of benefits you are eligible to receive.
All Health Funds offer options in Hospital Cover, Extras Cover (which are the add-ons that Medicare doesn't get involved in) and a combination of the two.
While there is no way to predict whether or not you will break a while leg skiing, there are other benefits that you can more predictably claim - such as pregnancy services, orthodontics and so on.
Most Funds also offer some flexibility in the way that the risk is shared with you, through a process called Excess or Co-Payments.
Hospital Cover
Hospital Cover helps with the cost of hospital treatment, treatment by your doctor and associated costs such as accommodation.
Health Funds offer various combinations of cover. Full cover for accommodation and in-hospital medical charges obviously command higher premiums, but you will be able to reduce your premiums by:
- agreeing not to be covered for some conditions or
- meeting some of the costs for those conditions (Excess or Co-Payments)
Moneytime allows you to look at these variations in cover by comparing similar products from the different Funds, and to make your choice based on what is important to you.
Extras cover
Funds offer Extras (or Ancillary) cover for a range of non-hospital services such as physiotherapy, optical or dental treatment, as well as therapies such as chiropractic and osteopathy.
This cover is often available separately, or in combination with hospital cover. Since it provides cover for the kind of non-hospital services we all need, it is most likely that you will consider at least some of these facilities as part of your overall profile of requirements.
Combined Hospital and Extras
By far the most popular cover available is in the form of a combination of both Hospital and Extras, and every Fund offers a wide variety of products in this segment.
When selecting Health Insurance, it makes sense to focus on the features and benefits that are appropriate to your life circumstances and lifestyle.
Choosing the right policy
The right policy for you is the one that most closely fits with your lifestyle and your financial circumstances. At Moneytime, we make the selection process easy by allowing you to identify the features you want in your cover. For example, if you are young, single and unattached, you are less likely to be interested in cover for pregnancy, IVF treatment or hip replacement. But you might be keen to keep your options open on chiro, physio and naturopathy.
Moneytime searches out only those policies which offer full coverage for the features you select. We also show you how you can lower your premium by choosing a cover with Excess or Co-payment options, where you pay an agreed amount from your own pocket for hospital visits. If the results don't suit you or you change your mind, you can easily go back and refine your choice to find a better fit.
Excess or Co-payments
Most Health Funds use the concept of an Excess or Co-payment to offer the option of lower premiums on some of their policies. An Excess is the amount of money you agree to pay towards the cost of hospital treatment, regardless of the number of days you are in hospital. For example, if you take out a policy with a $200 Excess, you will be charged a lower premium for your hospital insurance, but in exchange you agree to pay the first $200 of your hospital charges. Some policies charge the Excess for your first admission to hospital only, while others charge the Excess every time you are admitted.
A Co-payment, on the other hand, is a sum of money you agree to pay for every day that you spend in hospital up to an agreed amount. For example, if you have a Co-payment amount of $50, you will pay $50 for each night you are in hospital. There is usually an upper limit to the total number of Co-payments you will be required to pay for each stay in hospital, or over the course of a year.
Excess and Co-payment arrangements will differ between Funds and policies, so it is important to read the policy document before selecting your cover. Keep in mind also that the Medicare Levy Surcharge is still applicable if you take out a cover that has an excess greater than $500 for singles or $1000 for couples and families.
Waiting Periods
A Waiting Period is the time between taking out a policy, and when the insurance benefits actually become available to you.
Normally there will be no Waiting Period before you are eligible for hospital or medical treatment as the result of an accident that happens after you join the Fund. Also, you will not have to serve additional Waiting Periods if you transfer from one health fund to another with the same or a lower level of benefits, as any Waiting Periods you have already served are credited to you. However, the fund to which you transfer may require Waiting Periods to be served before you are eligible for any new or higher benefits on your new policy.
The Government has established maximum Waiting Periods that Health Funds are able to impose as a guideline. These are:
- 12 months for obstetric cases
- 12 months for pre-existing ailments
- 2 months for psychiatric care, rehabilitation or palliative care (whether or not these are pre-existing conditions)
- 2 months in all other circumstances
There are no Government regulations covering waiting periods for benefits under ancillary (Extras) policies.
You should always make sure you clearly understand the waiting periods associated with the cover you take out.
Federal Government Rebate
In 1999 the Federal Government instituted a rebate scheme in order to make Private Health Insurance more affordable and accessible. All Australians eligible for Medicare receive a minimum 30% rebate on their health insurance. People aged between 65 to 69 receive 35%, while those over 70 receive 40%.
The level of rebate is governed by the age of the oldest member covered by the policy, and is applied to the total premium paid.
There are three ways to receive the rebate:
- The most common is to deduct it from your premium by submitting a registration form supplied by your chosen Fund. (Note: Moneytime assumes this method will be used when providing you with premium amounts with which to compare policy costs. If you decide to use either of the other methods, the premium you pay to the fund will be correspondingly greater.)
- You may prefer to claim the rebate when completing your tax return, or
- As a cash amount from your local Medicare office.
Lifetime Health Cover
Lifetime Health Cover is a Government initiative to encourage people to take out Private Health Insurance at a young age, and to maintain that cover over their lifetime.
Joining a Fund before 1 July following your 31st birthday ensures that you receive the lowest rate for life. Joining after this date attracts an additional 2% loading for each year, up to a limit of 70%. People who have held Private Health Cover continuously for ten years are now rewarded by having their loading removed altogether.
Transferring between Funds will not affect your Lifetime Health Cover entitlements so long as the transfer includes Hospital Cover.
The Medicare Levy Surcharge
Currently, singles earing over $50,000 and couples or families (including single parent families) with a combined income greater than $100,000 who do not have Private Hospital Insurance are required to pay an additional 1% Medicare surcharge, on top of the 1.5% Medicare levy that most people pay. These thresholds are expected to increase to $100,000 for singles and $150,000 for couples/families, but this Bill is still currently with the Senate. Moneytime will update this information as soon as a decision is reached.
The Surcharge works out to be around $500-1,000 for singles and $1,000-1,500 for couples/families. This is avoided by taking out Hospital Cover with an excess no greater than $500 for singles and $1000 for couples. You may choose this hospital cover as part or your Private Health Insurance package or simply choose a basic hospital cover on its own, which, in some cases, can be even cheaper than the cost of the surcharge.