Australians already know that health coverage can provide security for individuals and families when medical needs arise. Many, however, do not know how to find the best value when comparing health insurance policies. Below are ten tips everyone should read before shopping for private health coverage.
1. Choose coverage that concentrates on your specific or potential health needs. The first thing you should do before comparing your health plan options is determine which policy features best fit your needs. A 30-year-old accountant, for instance, is going to need very different coverage than a 55-year-old pro golfer or a 75-year-old retired veterinarian. By understanding the health needs that most often correspond to people in your age and activity level group – your life stage – you can save money by purchasing only the coverage you need and avoid unnecessary services that aren’t relevant. For instance, a young family with two small children doesn’t need joint replacement or cataract surgery coverage. A 60-year-old school teacher isn’t going to need pregnancy and birth control-related services.
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Whether it’s high-level comprehensive care you’re after or the least expensive option to exempt you from the Medical Levy Surcharge while providing basic care coverage, always compare health insurance policies with only those services that make sense for you and your family.
2. Consider options such as Excess or Co-payment to reduce your premium costs. When you agree to pay for a specified out-of-pocket amount if you are hospitalized, you sign an Excess or Co-payment option to reduce your health insurance premium. If you choose the Excess option, you agree to pay a predetermined, specific amount when you go to the hospital, no matter how long your stay lasts. With a Co-payment chance, you agree to pay a daily sum up to a pre-agreed amount. For example, if Joanne has an Excess of $250 on her medical coverage policy and is admitted to the hospital, regardless of her stay, she will pay $250 of the final bill. If Andrew has signed a $75×4 Co-payment with his provider, he will pay $75 per day for the first four days of his hospitalization.
For younger individuals who are healthy and fit with no reason to expect to land in the hospital any time soon, either of these options is a great way to reduce the monthly cost of your medical insurance premiums.
Remember that private insurers have rules regarding Excess and Co-payments, including how many payments you must make annually on either option. It is important to read the policy thoroughly and ask questions in advance to clearly understand what you are paying for and what you can expect coverage-wise if you are hospitalized. Also, make sure you choose an Excess option greater than $500 if you’re purchasing an individual policy or $1,000 for family coverage to be exempted from the Medicare Levy Surcharge.
3. Pay your health insurance premium in advance before the cost increases. Each year insurance providers increase their premiums by approximately five percent sometime around April first, a practice approved by the Minister of Health. By instituting these annual increases, your health insurance provider can fulfill its obligations to policyholders despite increasing medical costs. Most private medical policy providers allow policyholders to pay for one year’s premium in advance, which locks them into the previous year’s rate for an additional 12 months – a great way to save money. To take advantage of the savings offered, most insurers require payment in full to be made within the first quarter of the year, between January and March.
4. Lock into low-cost health insurance at an early age. The most obvious advantage any Australian can take when saving on insurance premiums is buying in early at the least expensive rate. And by early, we mean before age 31. Everyone eligible for Medicare will receive at least a 30 percent rebate from the government on the price of their health care premium, no matter what age they are. However, purchasing hospital coverage before July first, following your 31st birthday ensures you the lowest premium rate available.
After age 31, your health insurance rate is subjected to a two percent penalty rate increase for every year after age 30 that you did not have health insurance. Therefore, if you wait to purchase private health coverage until age 35, you will pay 10 percent more annually than if you had purchased it at age 30. There are exemptions for some people who were overseas when they turned 30, new immigrants, and others under special exception status. However, suppose you purchased private insurance after the age of 30 and paid an age-loading penalty on your health coverage. In that case, you will be relieved of the excess liability after ten years of continual coverage. The earlier you lock into a private health plan, the more money you will save immediately and over your lifetime.
5. Choose a healthcare provider who works with your health fund. Determine which hospital you prefer if and when the need for treatment arises, and seek out those health insurance providers that agree with your hospital of choice before deciding on your health insurance purchase. It’s also a good idea to find out if your insurer has a list of “preferred providers,” which would include those physicians and practitioners who also have made arrangements with the health funds regarding their service charges. Request this information from every provider when comparing health insurance policies. This way, you can be sure you’ll receive the full gamut of benefits available at the lowest possible cost. These preferred providers often have “no gap” coverage – special rates that reduce or eliminate out-of-pocket expenses to policyholders.
6. Double-check your health insurance policy before scheduling treatment or procedures to ensure coverage. Any time you are headed to a private hospital for treatment, first check to see if the hospital and your health insurance provider agree to ensure you have adequate coverage. At the same time, check with your insurance provider, physician, and the hospital to see a Gap between their fees and the government’s Medicare Benefits. This is extremely important because if your physician charges more than Medicare covers and you do not have a “no Gap” plan, you could be responsible for a considerable bill. Contact your doctor and insurance company to double-check these items and avoid being saddled with an out-of-pocket expense you weren’t expecting.
7. File your expense claims promptly. When you have a health insurance membership card, you can file a lawsuit against your benefits at the time of treatment with no additional paperwork or filing to worry about, at least in most cases. Sometimes, you may still need to file a claim with your insurance provider. When that happens, make sure to file your claim promptly. The typical cut-off for insurers to pay health care claims is two years. You can file your health insurance claim directly with your provider or at your area Medicare office, which has a reciprocal agreement with most insurance providers.
8. Whenever you travel overseas, suspend your health coverage. Anytime you travel overseas for more than a few weeks. Still, in less than 24 months, certain medical insurance providers allow policyholders to suspend their memberships when they’re out of the country, freeing the policyholders from paying premiums during that period. While your insurance policy is broken, your Lifetime Health Cover status remains intact, so you do not have to worry about age loading added when you return home. Contact your health insurance provider to make sure of their policy and rules regarding waiting periods and re-activation. Also, Australia has reciprocal arrangements in certain countries, including New Zealand, Finland, Ireland, Italy, Malta, the Netherlands, Sweden, and the UK. For more information, visit http://www.smartraveller.gov.au.
9. Review your policy benefits annually. Lifestyles change; individuals get married, have children, age – children grow up and move out independently, and couples separate. A lot can happen in 12 months, so the Private Health Insurance Ombudsman recommends that everyone review their policy benefits once yearly to ensure their coverage still fits their needs. Regardless of your life changes, your Lifetime Health Cover status remains protected. Waiting periods for benefits equal to your current coverage are waived per the Private Health Insurance Act of 2007. This means you can file claims related to features you had before making any changes without interruption in benefits.