With premiums on the rise, it’s the one big question seniors should be asking about private health insurance.
Following the recent announcement that health funds are set to hike up their premiums an average of 3.25% in 2019, more Australians are deciding whether the price of health insurance is actually worth the strain on their wallet. Currently, there is a considerable amount of confusion surrounding the simplification of private health care system and what these changes will mean for new and existing members over 2019.
Over the last four years, the popularity of health insurance has declined. A recent Roy Morgan survey discovered that a whopping 43.1% of membersbelieve their cover is unnecessary, which begs the question: why stick around and keep your health insurance cover in 2019?
It’s simple: With the largest reform across health insurance for two decades soon being implemented, there’s never been a better time to evaluate your health cover.
Here’s how you do it:
Step 1: Select your current life stage below.
Step 2: Once you select your preferred coverage options, you will have the opportunity to compare quotes from multiple health funds.
The system is being simplified, there are potential savings and increased benefits for existing fund members. So, before making a decision to take out new cover or close your old health insurance policy, here are a few things to consider:
Understanding the new system
Standardised ‘Gold’, ‘Silver’, ‘Bronze’ and ‘Basic’ product tiers will be introduced to hospital insurance cover. This will make it much easier for consumers to understand their benefits and know what is covered under their policies. By standardising the product names and cover across funds, customers will now have the power to make more informed choices in relation to their cover thanks to easier comparison of similar cover, irrespective of the insurer.
Higher excess for lower premiums
These reforms also mean policyholders will be able to pay more in permitted excesses for private hospital cover to lower their premiums. Families could save up to $350 a year by increasing voluntary excess and singles could pocket savings of $200.
Shorter wait times
Public system waiting lists for elective or non-emergency surgeries are infamously long. Unless you’re prepared to join the queue, sticking with your cover can help you avoid it. According to the Australia Institute of Health and Welfare (AIHW), private patients can benefit from less than half the waiting time than public patients (20 days instead of 42 days for elective surgery).
Priority for emergency treatment
Public hospitals usually provide emergency treatment, so the system operates on a priority patient order. Patients in a critical condition are top priority, causing waiting periods to drag on for elective surgery and non-critical care. Being a private patient awards you the security of a locked-in surgery date, so you can be sure your operation will go ahead on time.
Save more on general services
If you’re considering ditching your health cover, out of pocket expenses could end up costing you more than a health insurance extras policy. With some general treatments and services falling outside hospital cover, and not covered by Medicare, private health insurance can give you rebates on these costs.
In the last financial quarter, the most common claims for extras were dental, optical, chiropractic and physiotherapy according to the Australian Prudential Regulation Authority (APRA).
Extras cover provides benefits towards services like physiotherapy, optometry, dental care, hearing aids and home nursing, which can easily run up thousands of dollars in out-of-pocket expenses.
Reap the financial benefit of private health insurance
Granted, private health insurance is typically not a small expense, but you may be able to take advantage of tax breaks and rebates to alleviate the costs of your cover.
Most Australians can benefit from income-tested government rebates on private health insurance to help pay for their cover. This can be claimed through tax returns or as reduced premiums.
Fund members can avoid paying for Lifetime Health Cover Loading by taking out hospital cover before the 1st of July following their 31st birthday. This allows you to dodge the 2% loading on premiums that would accumulate yearly if cover was taken out after this time. If you planned on taking out hospital cover at the age of 40, you would pay 20% more on your premiums than a person who took their cover out before they turned 31.
Combine your cover with Medicare
High-income earners can avoid paying an extra 1 to 1.5% (Medicare Levy Surcharge or MLS) tax on their income by holding a suitable level of hospital cover with a registered health fund. The levy amount depends on the income threshold you, or your family’s annual income falls under.
The final say?
Tackling the mountain of information surrounding private health insurance can be overwhelming. The process can be hard to navigate, and understanding the jargon can be confusing. That’s why Health Insurance Comparison is making this process simple. Comparing with us can save you time and money, because we do all the hard work and leave the decision-making up to you.
Before making a hasty decision, we recommend reviewing and researching your options to ensure you’re well-informed of costs, policy coverage and benefits. It pays to do your own research.
Using our free comparison tool only takes a few minutes. Thousands of Aussie seniors have already jumped on board. Why not join them?
 Roy Morgan, “Increasing doubt on value of private health insurance” (2018). http://www.roymorgan.com/findings/7781-increasing-doubt-on-value-of-priv…
 The Department of Health, “Private health insurance reforms: Increasing voluntary maximum excess levels” (2018). http://www.health.gov.au/internet/main/publishing.nsf/Content/private-he…
 Australian Institute of Health and Welfare, “National report presents information on private health insurance use in public and private hospitals” (2017).
 Australian Prudential Regulation Authority, “Quarterly Private Health Insurance Statistics” (2018). https://www.apra.gov.au/media-centre/media-releases/apra-releases-quarte…
 Australian Government Department of Health, “Private health Insurance Consumer Fact Sheet” (2015). http://www.health.gov.au/internet/main/publishing.nsf/Content/phi-consum…