24 January 2020
Many of us associate value with cost – but when it comes to health insurance, the saying is true: you get what you pay for!
You may have caught yourself saying exactly that the last time a bargain tool you purchased second-hand malfunctions after the first use. After all, the chance to be thrifty is always there. But there are times when value and quality should definitely be the front runner over price alone. Like when you want your purchase to last, to fit you and your family’s changing needs, to be so useful it essentially ‘pays for itself’ over time, and, perhaps most importantly, when the reason you want it in the first place is to look after something as important as the health of your family – as should be the case with your health insurance.
Unfortunately when shopping for insurance, a lot of people don’t look beyond the surface, because – let’s be honest – it can be complicated for the average person to understand the finer details of a policy. Most just note the tick next to dental, the thumbs-up beside physio, check the monthly premium and say ‘that seems good’, when, in reality, the details around benefits and Annual Maximums need to be looked at more closely to find an appropriate match.
Over the past five years, more than 2 million Aussie’s have ditched their private health insurance, citing reasons around premium costs, lack of value for money and not believing in private health insurance¹. Looking at the broader picture and patterns, it’s evident that much of this departure is a result of people being paired with policies that don’t suit.
It’s a scary trend, given that only 760,000 of 890,000 patients who were added to the public hospital elective surgery waiting list during 2018-2019 were admitted for surgery in the same period.²
Now isn’t the time to ditch health insurance. It’s the time to review and understand your policy.
The value of health insurance is often misunderstood simply because people are uncertain about what they’re actually covered for, and to what extent. So dissect your policy. Get to know it. If there’s a component you don’t understand – contact your fund and ask. You stand to benefit greatly simply by being informed.
As a starting point, use these tips when reviewing/comparing policies:
- Educate yourself – know what everyday things you can claim on.
Extras are great for preventative health. They help keep you fit and well. Does your policy include physiotherapy, remedial massage services, braces, hearing aids or orthotics? If you’re unsure what a particular health service includes – look it up. If you’re paying to be insured for benefits use them!
- Look beyond the lowest price.
Analyse the benefits included in a policy alongside the premium and see if the maths adds up. What will you get back on a standard physio, psychologist or podiatrist consult, and what’s the annual maximum set at? Is it more cost effective to pay a higher premium knowing your money will stay in your pocket when you visit your health provider?
- Get over the “why should I pay for pregnancy when I don’t use it?” mentality.
There are four hospital product tiers; Gold, Silver, Bronze and Basic. To be a classified as Gold the policy must provide cover for all 38 mandated clinical categories, including ‘Pregnancy and birth related services’. That doesn’t mean you’re paying extra for pregnancy, you’re paying for comprehensive Gold tier insurance, with no exclusions – ultimate peace of mind.
Given that exclusions can catch you without cover when you need it, and the fact that some ‘Silver Plus’ policies are priced very similarly to ‘Gold’ policies (yet have a number of exclusions) – it’s fair to say ‘buyer beware’.
- Beware of applying an excess.
Most people don’t realise that excesses can become a barrier to treatment when other unexpected and uncontrollable out of pocket costs hit – such as gap payments for doctors and anaesthesiologists. These unexpected costs often hit patients at the same time that they’re dealing with a loss of income, so removing excess from the equation helps protect you from the unforeseen – as good insurance should.