Long wait times to speak to actual humans, small annual limits and exorbitant annual rate rises are just some of the reasons why many Australians question the value of their private medical cover. Perhaps you just got a very small rebate on a consultation or you simply do not use your extras cover. If this is you, it may be time to switch your health insurance cover. But what is the best health insurance in Australia? Overall, it will largely depend on your own circumstances, but in short, it is a level of cover that works with your lifestyle.
See below for our tips about the important things to consider when you’re reviewing your health insurance.
Bigger is not always better
Be aware that even the highest levels of private hospital insurance will not provide rebates for all procedures, consultations or surgeries. A procedure like labiaplasty is unlikely to be covered if it’s undertaken for purely cosmetic reasons for example, so shop around to see exactly what you will receive in benefits and rebates even on the highest level of cover. On the topic of benefits, if you’re considering switching cover, check to see if any additional waiting periods or restrictions of benefits will apply when moving funds or changing your level of coverage. It may mean planning the timeline in which you switch to avoid missing out on rebates you would have otherwise received. Another factor to be mindful of when switching, is whether any excesses for private hospital stays will reset from when you sign up to a new fund by calendar year, or by financial year. It’s frustrating having to pay an excess for a private hospital stay if you are just outside the period in which your limits have reset.
Remember, if you earn over a certain amount you will need to pay the Medicare levy surcharge. So if you are dropping down your cover to save money, it might be the most cost effective to dial down the extras, as you need private hospital cover to avoid the surcharge. In other words, come tax time you will get less back in your return if your earn over 90k for singles and 180k for families, as a percentage of your taxable income will be subject to the surcharge on a sliding scale if your cover is inadequate.
Your relationship status is also cause to review you level of health cover. When you have a significant other in your life, teaming up for your tax and health insurance can deliver some real cost savings. It’s good to know that couples with children and without are subjected to the higher family tier income bracket for the Medicare levy surcharge and some funds will have slightly cheaper joint policies so you’ll pay less on your health insurance premiums. Others may have options such as a combined excess where if one of you has a private hospital stay and the other also needs to in the same year, the excess will only be charged once. Vice versa, if you end a relationship, the same fund may not suit your needs as a newly single individual, so find a fund with cover that suits your solo lifestyle best rather than defaulting to a singles policy from your current health insurance company.
Switching jobs is also a good time to review your health policy. Although not as common these days, some companies will offer subsidised health care options that will be more budget friendly. Other industries, like defence, will have dedicated health funds that are not open to the general public and are often run as not for profit and offer better benefits. If you suddenly become eligible for a new health fund because you have taken up a new position, examine their product disclosure statement carefully as you will often be at an advantage to get cover through them.