Health insurance guide
An apple a day keeps the doctor away…
In Australia, Medicare offers public health care for citizens, permanent residents and those from countries with reciprocal healthcare agreements. However taking out private health insurance provides you and your family with a wider range of health care options and benefits.
Read our health insurance guide to find helpful information on:
- Why do I need private health insurance?
- The benefits of private health insurance
- Why compare health insurance?
- Types of health insurance
- Important things to consider when choosing a health insurance policy
- Tips to save on health insurance
- Health insurance FAQ’s
- Health insurance resources
Why do I need private health insurance?
Even if you are a fit and healthy person you never know what might be around the corner. Did you know a 1/3 of all women and a ¼ of men will suffer cancer at some stage in their life? If you suddenly become ill there is no guarantee that the treatment you need will be available to you in good time through Medicare.
When you are sick, the last thing you want to worry about is the high cost of medical bills. Private health insurance provides you and your loved ones with peace of mind knowing that if treatment is needed you will be covered.
The benefits of private health insurance:
Private health insurance offers you more options and more control over your treatment, and there are financial benefits too!
- Decide which hospital you get admitted to
- Decide on your own doctor
- Less waiting time
- Ambulance cover is provided in some policies
- More cover including dental, optical, physiotherapy, podiatry and more
- Lifetime health cover benefits – sign up early before you’re 31 years old and receive lower premiums
Did you know there are financial benefits to taking out private health insurance? Australians with private health insurance will receive a rebate from the Australian Government to help cover the cost of premiums. Avoiding paying extra taxes and find out more about the Medicare Levy Surcharge.
Why compare health insurers?
With so many health funds and health insurance products to choose from, it’s easy to become overwhelmed or confused when choosing a provider. We help you compare overall insurers scores based on combined customer reviews to help make your decision that little bit easier.
Types of health insurance:
There are 2 main types of private health insurance available to you: hospital cover and general treatment (commonly known as ancillary or extras cover). You can buy these separately or as a combined package. Many health funds allow you to pick and choose which areas of cover are important to you so that you can tailor a policy to suit your needs.
Hospital cover provides benefits for hospital accommodation, theatre and doctor’s fees. Depending on your policy and level of cover, you’ll get all or some of the costs refunded. You can also usually choose your preferred doctor and hospital.
General treatment provides benefits for health services you’re more likely to need on a regular basis such as dental, optical, physiotherapy and chiropractic treatment.
Important things to consider when choosing a health insurance policy:
Who needs to be covered?
Are you single or do you have a family? If you have a family, you might be able to buy a policy which covers you for everyone.
What are you and your family’s health care needs?
Pregnancy is one that often catches people out.
Are there any waiting periods?
Waiting periods vary between health funds, so it is important to understand these especially if you’re looking to utilise particular benefits. Waiting periods for each service will be set out in your health insurance policy.
Are there preferred supplier restrictions?
Some health funds restrict you to using ‘preferred suppliers’. So if you want to visit the dentist up the road, feel free.
Excess or Co-payment options to lower your premium
Not everything is covered by private medical insurance, and most funds have an excess fee to be paid. You may be able to lower your premium if you are prepared to pay a higher excess.
Tips to save on health insurance:
Private health insurance gives you peace of mind when it comes to your family’s health, and it doesn’t need to cost you an arm and a leg. Here’s how you can save on health insurance.
Don’t settle for second best!
Forget trawling the internet for hours to find the best deal. Use an online comparison to compare competitive health insurance quotes from reputable insurers in one place. You can quickly and easily compare quotes and levels of cover, and they are free to use!
Once you have found a few quotes that suit your lifestyle and budget, you can then do some further research into the top two or three insurers on your list. Make sure you always read the fine print of any policy before purchasing, so you know that it is appropriate for your lifestyle and circumstances.
The earlier, the better!
Purchasing private health cover before you turn 31 will save you money. If you join a health fund after your 31st birthday, you will most likely be charged a Government penalty of an additional 2% added to your premium for every year after the age of 30 that you went without private cover, up to a maximum of 70%. For example, if you wait until you’re 50 to join a health fund, you can be charged 40% more than someone who joined the same fund before 30. This added surcharge will cease after ten years of continuous hospital cover.
If you are over 31 and you haven’t yet purchased insurance, it may be worth contacting your chosen health fund as some exemptions apply for people who were not in Australia on their 30th birthday, migrants and other exceptions.
Think about what benefits you need
There are many varying levels of cover available, so think about what benefits you really need and chose a policy that reflects your lifestyle. For example, if you’re planning on starting a family in the next few years you’ll be looking for pregnancy and birth-related cover, or if you’re playing a lot of sport you may be interested in high levels of cover for physiotherapy treatment. On the other hand, if you’re getting older you may opt for a policy with cover for hip and knee replacements and other age-related medical issues. When using the online comparison, you can easily compare quotes and levels of cover, so you can save time and money if you know what you’re looking for before you start.
Increase your excess or co-payment to lower your premium
As with all other forms of insurance, private health insurance policies will generally have an excess fee. This is the amount that will be deducted in the event of a claim, so for example, if your policy has a $300 excess fee, and your hospital bill is $1000, your insurance will cover $700 of that bill. You can usually opt to pay a higher premium to reduce this excess, or pay a lower premium with higher excess.
On the other hand, a co-payment is an amount paid daily when you go to hospital. If your co-payment is $60x5, for example, and you were hospitalised for 7 days, you would be charged $60 for each of the first 5 days you were in hospital, and then nothing for the remaining 2 days.
If you are fit and healthy, and just looking for a budget policy to cover you for unexpected accidents, you may choose to save money by increasing the excess or co-payment amount on your policy.
The only thing to keep in mind when selecting your excess or co-payment amount is that in order to avoid the Medicare Levy Surcharge (an additional tax of 1% of your income on top of the standard 1.5 Medicare Levy), the excess fee on your private health and hospital cover can be no greater than $500 per annum for singles, or $1,000 per annum for couples and families.
Freeze your policy for long-term travel
If you’re heading overseas for longer than a month, many insurers will let you freeze your membership for the time you’re away, so you don’t have to continue paying for health insurance while you’re overseas. Just make sure you purchase a comprehensive travel insurance policy to cover you while you’re abroad!
When you get home, you can notify your health fund and re-start your membership immediately. If you’re planning on suspending your cover, make sure you ask your health fund about maximum suspension periods, as different insurers will have different conditions, and some may limit the time you’re away to one or two years.
Do an online health insurance comparison once a year
Once you’ve found a health fund that you’re happy with, there’s no reason to feel tied down for life. Switching health funds is not as complicated as it sounds, and may save you money down the track. Each year, insurers review their policies and prices and make changes that may not suit your budget or lifestyle, so it’s a good idea to use online comparisons once a year to get an idea of where your insurer sits within the market.
Pay your premium in advance
Each year, Australian private health funds will increase their premiums to keep up with rising medical costs. Most health funds will give you an option to pay for the next twelve months’ cover in advance, so you won’t be hit with rising costs during the year.
Need medical treatment? Check your insurance policy first!
If you’re going to a private hospital or doctor for a procedure or consultation, it’s essential that you check with your insurance policy first, to confirm that your insurer has an agreement with the hospital. Your health fund should also be able to give you a list of ‘preferred providers’, which are able to charge you a special rate depending on your insurance provider.
It’s also important to find out whether or not there is a gap between the Medicare Benefit Schedule and the amount that the doctor is charging you. Find out whether your insurer offers a ‘no gap’ or a ‘known gap’ scheme, and if your doctor agrees to that scheme. If a doctor participates in a ‘no gap’ scheme, your health fund will cover the out of pocket expenses so you won’t need to pay anything. With a ‘known gap’ scheme, you will be charged a partial amount, which will be determined before the procedure. If your chosen doctor does not participate in either of these schemes, you could land yourself a hefty medical bill!
Lodge your claims immediately
The sooner you lodge your claims the better. In most cases you will be able to lodge a claim on the spot with your private health insurance membership card. However, after a series of consultations and procedures that have been drawn out over a longer period, it may take several months to acquire the necessary paperwork to lodge the claim. Many health funds will require you to claim within a certain timeframe, so make sure you are aware of this if you need to lodge a claim.
Health Insurance FAQ’s:
What is Lifetime Health Cover?
Lifetime health cover is the Australian government’s scheme to get people to take out hospital insurance earlier in life. As explained above in how to save on health insurance, if you don’t have hospital cover on the 1st of July after your 31st birthday and then you decide to take out hospital cover later, you will have to pay the Lifetime Health Cover Loading of 2% on top of your premium for every year you are aged over 30.
I've just turned 30; do I have to purchase private health insurance?
No it is not mandatory, however the longer you wait to buy health insurance the more you will pay.
I've just become a permanent resident; can I purchase private hospital cover without Lifetime Health Cover loading?
Yes, if you are over 31 you have one year from the date that you joined Medicare to buy a policy without getting the LHC loading.
I'm applying for a 457 or 485 visa; do I need private health insurance?
Yes, it is mandatory to get private health insurance with a 457 or 485 visa.
I’m an overseas student in Australia; do I need private health insurance?
Yes, it’s a condition of your visa to take out the appropriate health cover. Check to see if the country you’re from has a reciprocal healthcare agreement with Australia to understand the level of cover you might need to buy.
What is the Private Health Insurance Rebate?
The Australian Government Private Health Insurance Rebate is for Australians who are eligible for Medicare and also have private health insurance. Most people receive a rebate of 30 cents for every dollar paid for private health insurance. You might get this taken off your premiums or you can claim it back at the end of the financial year.
Do I have to pay the Medicare Levy Surcharge?
The Medicare Levy Surcharge is imposed on Australian tax payers without private hospital cover and who earn over a certain income.
Private health insurance resources:
For more information on health insurance matters you can refer to the following links:
- Private health Insurance ombudsman privatehealth.gov.au
- Department of health and ageing health.gov.au
- Australia's electronic health record system eHealth.gov.au
- Australian Taxation Office
We hope you found our guide to health insurance helpful. If you need more help feel free to contact us and one of our friendly team will get back to you asap.
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