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Private health insurance made easy
Considering private health insurance but not sure how to choose the cover that's right for you? You're not alone.
A recent online survey by News Ltd revealed that over 50% of people find the process of choosing health insurance confusing. And no wonder. There are dozens of health funds and hundreds of health insurance plans in Australia. The majority of people also said they spent a week or more researching private health insurance before they made a decision.
Want to do it the fast and painless way? We've put some handy hints together to help you select a health insurance plan that suits you and your family, while hopefully saving you a few dollars in the process.
1. Do I choose Hospital, Extras or both?
Health insurance consists of two parts that you can either take out individually or together.
Hospital: This cover helps with the cost of accommodation, theatre 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 optical, dental and physio. 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 cover that suits you.
*The Medicare Levy Surcharge (MLS) is an extra 1% tax incurred by individuals earning over $50,000 p/a and couples/families earning a combined income over $100,000 who do not have hospital cover.
2. What level of cover do I want?
Different private health insurance plans offer levels of cover to meet different 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. $600 on optical benefits as opposed to $250 on a lower plan
The most basic plans would likely cover you for:
- public hospital only
- fewer services (some services may be partially covered, and others not at all)
- lower limits for extras
Obviously, the greater the benefits, the higher the premium. Only you can decide which plan works best for you. A comparison engine like moneytime can help you choose the level of cover you want and show you which health insurance policies suit your needs.
3. What features should I look for?
In both the hospital and extras categories, you'll find a whole list of features you can get covered for. To figure out what 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 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.
4. Excess, Co-payment or neither?
Both Excess and Co-payment options allow you to lower your upfront premium 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're quite sure you won't need to go to hospital any time in the near future, but still want to retain hospital cover just in case.
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, try 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 – just log onto and start comparing health insurance plans today.