Trying to decide on private health cover can be a very overwhelming and costly experience. Follow these expert tips to help you get the best value for your money.
Are you currently considering taking up private health insurance or changing companies? Researching options can be a very confusing process.
Abigail Koch, spokesperson for comparethemarket.com.au, sheds some light on how to get the most out of your insurance with these top 12 tips.
1. Two single policies in place of a couples policy can help you save
If you're a couple with basic hospital cover and you decide to start a family, then it can be more cost effective to take out two single policies (with only the woman's including birth-related services) than it is to go on a couples policy with birth-related services. Once the baby is born then you'll have to upgrade to a family policy but this could be a great way to save in the meantime. Potential savings can be approximately $1000.
2. Split your hospital and extras cover
Many people don't realise that they may be able to find more value for particular health needs if they get their hospital and extras cover from different health insurance funds. Below is an example of someone from NSW that could find more value for dental by splitting their hospital and extras cover:
- HCF's Mid Hospital $500 excess and Silver Extras is $110.87 per month. You get:
Private hospital cover including Heart Surgery
$500 combined limit for General & Major Dental
If you switch to:
- Bupa's Budget Hospital $500 excess with CUA's Silver Extras. $104.27 per month. You get:
Private hospital cover including Heart Surgery
$1000 combined limit for General & Major Dental
3. Choose a fund that is valuable to your particular life stage
If you've got kids then it can be beneficial to go with funds that throw in some helpful 'freebies'. A couple of examples are: HCF's platinum extras cover offers free scale and cleans for kids twice a year, and HIF will waive excesses for kids on some of its private hospital policies.
4. Make the most of payment discounts
Keep your eyes peeled for funds that offer a discount if you elect to pay by direct debit. Some funds offer up to 4 per cent off your annual premiums if you set up an automatic direct debit from your bank, building society or savings account. If you’re a family paying $3500 per annum, that’s a saving of $140.
5. Tailor your health policy to suit you
Request your annual claims statement from your current health fund to find out what you claimed for over the last 12 months. If your claimable benefits were much lower than the premium you paid, then perhaps it’s time to think about switching to a policy that’s more relevant to your needs.
6. Do your homework on extras cover
The amount of money you can claim back from your extras cover varies dramatically from fund to fund, so make sure you research claimable returns. It can be better value to choose a fund that pays out a percentage of your bill for each treatment (e.g. 60 per cent) rather than a fixed amount (e.g. $30). Also, funds that offer a combined annual limit, as opposed to sub-limits for individual treatments, are often much better value as you have more flexibility over which treatments you want to claim on.
7. Restricting your benefits could help you save
Consider switching to a fund that restricts benefits for a set time in order to bring down the price of your premium. If you know you want to be covered for certain treatments such as assisted reproduction or eye surgery, but don’t expect to claim for these for another couple of years, then a fund with benefit limitation periods on these items may be an option and could help you save in the meantime.
8. Make the most of free comparison sites
Comparing and switching health insurance policies can seem like a minefield, but with up to $1500 in potential savings it could make sense to switch. Many people don’t know that if they switch suppliers, their old fund will refund any premiums paid in advance. The new policy will start the day after the old policy ceases. So, there’s no need to wait to switch policies.
9. It sounds simple but 'remember to claim'
The cost of your private health insurance overall is a balance between the premium and your potential returns through claims. “You must claim to ensure your return on investment, particularly with Extras policies,” Abigail says. “When making a booking with your healthcare provider, check they offer HICAPS – this gives you an immediate claim. The risk of claiming at a later date is you might forget altogether – which we think many do.”
10. Know a policy’s returns in potential claims before buying
“When speaking with policy holders, we find most people forget what they’re insured for and what amount they can claim back,” Abigail says. “For these, the cost of private healthcare becomes a liability, not a benefit. You cannot buy private health insurance and file it away.” When assessing the value of a policy, know the services you claimed for in the last 12 months, how often you claimed, your spend on health services which you didn’t or couldn’t claim for, and any new services you might want to claim for in the following year.
11. Look out for promotions
Some health insurers will offer the first month of cover for free for a limited time, while others may offer vouchers of up to $200 if you refer a new member.
12. Switch and receive a refund from your old policy
“Many people don’t know that, with health insurance policies being contract-free, they can switch at any time, and their old policy will refund any premiums paid in advance. The new policy will start the day after the old policy ceases,” Abigail says.