Private health insurance myths: busted!
With the changes to health insurance premiums coming in on April 1 this year, it’s hard to avoid thinking about your own health insurance. There are a lot of misconceptions about changing health funds. The truth is: the law ensures you’re not locked in.
MYTH #1: “It’s all too hard. I give up.”
BUSTED: There’s a view that Health Insurance is hard to switch because it’s a complex product and there are over 30 funds and more than 40,000 different options to compare. But the truth is, all policies fall into one of 3 categories: top, medium or basic cover.
The key is to keep it simple. if you were hiring a tradie, would you get a quote from everyone in the Yellow Pages? Of course not. Get 3 quotes and you’ve got a good basis for a solid decision.
Start by getting a quote on the current FiftyUp Club special offer with HCF. Click here.
MYTH #2: “I can’t switch because I don’t want to serve my waiting periods again”
BUSTED: There are laws in place to protect switchers and encourage it. For example, ‘portability provisions’ mean you can take waiting periods you’ve already served with you.
The Private Health Insurance Ombudsman also has a good fact sheet at this link.
MYTH #3: “I’ve already paid for the year”
BUSTED: You can switch at anytime and request a refund of unused premiums from your current provider, so this is not a barrier.
MYTH #4: “It’s not worth it”
BUSTED: People often save hundreds on their annual premium by shopping around and switching, so it can be worth it. But there are other ways to save without switching too.
- Increase your excess: As with most insurances, you can often cut your premium by increasing your Excess. For Health Insurance, “an excess is an amount that you agree to pay towards the cost of hospital treatment, in exchange for lower premium costs”. The maximum excess allowed by the Federal Government is currently $1000 for families and $500 for singles.
- Ask about contribution groups: You don’t need to be part of a business to enjoy the benefit of a ‘corporate discount’. There’s actually a very handy loophole in Health Insurance regulation that says Health Funds can offer “contribution group” discounts of up to 12% off the standard premium to defined groups of people, such as employees of a company or motoring club or other organisations.
- Pay annually, by direct debit: If you pay annually before April 1, when all health funds raise their Premiums, you pay the old price for the coming year and you effectively postpone the price rise for 12 months. While it’s not an option for everyone, it is worth considering.
MYTH #5: "I need everything I've paid for"
BUSTED: As your circumstances change, so do your health insurance needs. For example, you could be paying for obstetrics, IVF and pregnancy services, even though your days of starting a family (or at least thinking about it) are far behind you. Switching to a policy that doesn't include unused extras can saves about $500 p.a. for a family, on average. Reviewing your policy will help you work out whether you still need everything you're paying for, or if you'd benefit from switching.
