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Health insurance comparisons

We cut through health insurance jargon to help you decide what’s best for your budget.
 
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01 .Your guide to health insurance

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Compare health insurance with over 500 CHOICE buy health insurance policies from 15 health funds in Australia. Use our health insurance comparison tables with our rating of policy features to help find the right health cover for you. 

A $7 fee for seeing a doctor, an increase in the Medicare Levy, a $5 increase in Pharmaceutical Benefit Scheme (PBS) prescriptions, a 6.2% increase in the average cost of health insurance, and a diminishing private health insurance rebate.

These are just some of the government solutions to plugging up the financial holes in our national health system – and in almost all cases, they'll be directly hitting your wallet.

So with less cash in your pocket, how can you get the best-value hospital insurance?

You can compare CHOICE buy policies from these funds:

  • ahm Health Insurance
  • Australian Unity
  • BUPA
  • CUA Health
  • GMF Health
  • GMHBA
  • GMHBA (Frank)
  • HBF
  • HCF
  • Health partners
  • HIF (Health Insurance Fund)
  • Medibank
  • NIB
  • Peoplecare
  • Queensland Country Health Fund
  • Westfund Health Insurance

We have included only the recommended CHOICE buys in the tables, if your current policy is not a CHOICE buy you will not be able to use the tables to compare your current policy.

Should I get health insurance?

We’re glad you asked. The good news is, if you’re a permanent Australian resident you already have health insurance: it’s called Medicare. For most of us, our Medicare health insurance premiums cost two per cent of our annual salary for 'free or subsidised' access to doctors, specialists, optometrists and treatment and accommodation in public hospitals, plus a few other perks.

Thanks for that, smart alec, we hear you say, I already knew that. So let us re-phrase…

Should I get private health insurance?

Good question. But we need to break it down further because there’s really no such thing as private health insurance. There’s private hospital insurance and there’s private extras insurance, and we’re not just being sticklers here because a lot of people waste good money on one of these insurance types without ever using it. We don’t want you to be one of them.

Hospital insurance versus no hospital insurance.

Now we’re getting down to the nitty-gritty. You’re already forking out at least two per cent of your pay packet on Medicare, so why take out private hospital insurance as well?

Private hospital insurance, the case against:

  • If you earn less than $90,000 in 2014-15 (double that for couples and families), the only financial incentive to get private hospital cover is that you’ll have to pay the Lifetime Health Cover (LHC) loading if you take out hospital cover after you’re 31.
  • The public hospital system serves people who require emergency surgery well. For more complex and expensive medical conditions, you’ll end up in a public hospital regardless of whether you have private hospital insurance or not, because public hospitals have the equipment.
  • If you’re admitted to public hospital as a public patient, Medicare will foot the doctor’s bills. 
  • But if you’re admitted as a private patient, to a private or public hospital, you may end up paying a "gap fee" to your doctor or sometimes even to the hospital. That’s the gap between what Medicare and your health fund pays, and what the doctor’s fee actually is, and it can run to thousands of dollars.

Private hospital insurance, the case for:

  • If you earn $90,000 or more, taking out at least basic hospital cover can cost you less than paying the extra Medicare Levy Surcharge (MLS).
  • For elective surgery in the public hospital system, you’ll end up on a waiting list...
  • ... and you won't be able to choose your own doctor.
  • Private hospitals generally have better conditions and service than public hospitals.
  • For every year that you delay getting private hospital insurance after you turn 31, you’ll pay more for it in the form of the Lifetime Health Cover loading if you do eventually get it.

Decided you want private hospital insurance? Choose your policy with our selection of private hospital policies.

What about extras cover?

Theoretically, the whole idea of paying insurance premiums is to put a financial cap on how much money comes out of your pocket when the unexpected occurs. Rear-ended a Porsche? No problem, pay your $500 excess and the insurer will pay the rest. House burnt down? Pay the excess and the insurer will re-build. Need a new hip? Pay the excess and your insurer will pay the hospital costs (and maybe some of the doctor’s fees).

Need to go to the dentist? Your extras insurance will pay the first $200 (for example) and you pay the rest. Do you see the difference? The insurer’s liability is capped, yours isn’t.

For that reason, extras "insurance" really isn’t insurance at all, but rather a budget management tool.

Do I need extras insurance?

If you’re buying "health" insurance purely for tax reasons – i.e. to avoid the MLS – then no. Not having private hospital insurance can mean you pay extra tax and higher premiums should you take it up again, but these penalties don’t apply to extras cover.

Extras rarely covers the full cost of your treatment. On average, health funds pay about:

  • half the cost for the dentist and for glasses
  • a third for medicines not covered by the PBS
  • a quarter for hearing aids.

And there are wide variations between funds and policies, too. The most generous health insurance fund for dental refunded 75% on average in 2012-13, while the most miserly health fund covered just 31%.

But there are two groups of people who benefit most from extras insurance.

  • Families generally pay the same health insurance premium as couples – or double the singles premium – so children are insured for free. (Tip: Some health funds offer no-gap cover for kids; for example, for dental.)
  • People aged 55-74 make the most use of their extras cover benefits compared with other age groups, and receive an average benefit per person of about $500 – almost 10 times more than for children under five.

What about combined?

This is simply hospital and extras combined into one policy. It can be useful because you only deal with one health fund for both types of insurance. It can also be useful for the health funds because they’ve just sold you two insurance policies in one go.

Ask yourself these questions before buying a combined policy:

  • Do you need both hospital and extras? 
  • Do you need to get them from the same fund?

While there are some good combined policies available, you can often get a better deal by buying the best value extras and hospital insurance from separate funds. As always, shop around.

Ambulance cover

Ambulance expenses are not covered by Medicare, and the extent of coverage by state governments varies. By definition, you can’t predict if or when you’re going to need an ambulance, so it’s worth making sure you’re covered:

  • Queensland and Tasmanian residents are covered by the state government.
  • NT, SA, Victorian and WA residents can purchase insurance through a private health fund or subscribe to the state ambulance service. 
  • NSW and ACT residents ambulance are covered if you have hospital insurance, otherwise you can purchase through a private health fund.

Ambulance cover is sometimes included with hospital cover and sometimes with extras, so if you buy health insurance check:

  • Does the policy include ambulance cover?
  • What kind of ambulance cover is it? Some funds only cover ground transport, excluding air ambulance for example, while others may only cover emergency ambulance, for example, excluding transfers between hospitals.

Why do you keep quoting acronyms at me?

Because there are a lot of them. Here’s a list of the most important ones:

  • LHC – Lifetime Health Cover (loading) adds two per cent to your hospital cover premium for every year you don’t have hospital insurance on 1 July following your 31st birthday. It can add up to 70% and applies for the first 10 years of your hospital cover, but doesn’t apply if you were born on or before 1 July 1934. Note this is for hospital insurance only – there is no surcharge to extras insurance.
  • MLS – Medicare Levy Surcharge is a surcharge on top of the Medicare Levy that you pay if you don’t have private hospital insurance (again note it’s hospital – you don’t need extras to avoid this). Usually it costs less to take out basic hospital cover than pay the MLS, income thresholds are listed in the table below
  • PHIR – Private Health Insurance Rebate OK, it doesn’t normally go by an acronym, but it is a real thing. It’s a rebate that you get from the government on your private hospital and extras insurance if you fall in the following thresholds...
Private health insurance rebate and MLS income thresholds (2014/15 - 2017/18)
Single <$90,001 $90,001-105,000 $105,001-140,000 >$140,000
Families <$180,001 $180,001-210,000 $210,001-280,000 >$280,000
Rebate

Standard Tier 1 Tier 2 Tier 3
Age <65 29.04% 19.36% 9.68% 0%
Age 65-69
33.88% 24.20% 14.52% 0%
Age 70+
38.72% 29.04% 19.36% 0%
Medicare Levy Surcharge
All ages
0.00% 1.00% 1.25% 1.50%

Waiting periods & switching

  • Waiting periods for extras vary per policy. Usually its two months for most services, 12 months for major dental and 36 months for hearing aids.
  • For hospital cover, waiting periods for pre-existing conditions are generally 12 months.
  • If you switch to hospital cover that's considered equivalent or lower than your existing policy (check with your health fund), the waiting period you served on your previous policy will be carried across.
  • But if you upgrade your cover or lower your excess, you’ll have to serve a new waiting period for the difference in cover.

But wait! There’s more…

Decided private health insurance is right for you? Great – but don't get out your wallet just yet. Read our buying guides on hospital and extras insurance first.

If you’re ready to buy a policy, check our health insurance comparisons. You can also review the standard information statement, a one-page fact sheet about your policy at privatehealth.gov.au

 
 

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Doctorscoat

Australia’s health system is layered with an intricate and seemingly impenetrable web of incentives and penalties – Private Health Insurance Rebate, Medicare Levy Surcharge, Pharmaceutical Benefits Scheme, Medicare co-payments, Lifetime Health Cover, gap payments, preferred service providers and so on.

This minefield can leave consumers confused and reluctant to switch, even though they may be missing out on big savings by not doing so. So how do you cut through the jargon to select the right health insurance for you?

Private hospital

If you're reading this page, you’ve probably already decided on going private. So here’s a feel-good list of the advantages of private health insurance:

  • If you’re a single person earning more than $90k or a couple or family earning over $180k in the 2014-15 financial year and you have private hospital insurance, you don’t have to pay the Medicare Levy Surcharge (MLS).
  • If you’ve had private health insurance since 1 July 2000 or 1 July following your 31st birthday (or were born before 1 July 1934), you don’t pay the Lifetime Health Cover (LHC) loading on private health insurance.
  • If you’re a single person earning $140k a year or less or a couple or family earning $280k or less, then the government subsidises your private hospital and extras insurance.
  • You can jump the waiting lists for elective surgery. While elective surgery is usually not life-threatening it can still be very uncomfortable and limit your life, such as if you have trouble walking because you’re waiting for a hip replacement or lose your sight waiting for cataract surgery. 
  • You can choose your own doctor and you can go to a private hospital, which generally have better conditions and service than public hospitals.

The full list of income thresholds for the Private Health Insurance Rebate and Medicare Levy Surcharge is in our health insurance buying guide.

What private hospital insurance do I need?

Why do you want it? If you just want to avoid paying extra tax (the MLS), then go for the cheapest cover.

Basic cover policies are a good fit for avoiding tax, but of little use if you actually want to use them as they commonly restrict cover to public hospital only, or exclude a long list of treatments such as:

  • Assisted reproduction and IVF 
  • Obstetrics and birth-related care
  • Cataract and eye lens surgery
  • Cardiac and cardiac related services
  • Non-cosmetic plastic surgery
  • Dialysis for chronic renal failure
  • Gastric banding and obesity surgery
  • Hip, knee and other joint replacements
  • Palliative care
  • Psychiatric care
  • Rehabilitation
  • Sterilisation.

Some basic policies are called public hospital policies as they only cover treatments in a public hospital. That means you can’t jump the waiting list, but you can choose your own doctor and possibly get preference for a private room.

Medium cover If you mainly want hospital insurance for tax reasons but also think you may still want to use it, then consider medium level cover. But peruse the policy features carefully, because these policies may still exclude or limit treatments such as:

  • Pregnancy and birth related services
  • Assisted reproductive services
  • Cataract and eye lens procedures
  • Hip, knee and other joint replacements
  • Dialysis for chronic renal failure
  • Sterilisation.

Cover that only excludes pregnancy, birth and related treatments could be a good choice for singles or more mature people. So if this fit is you, check the hospital comparison table for policies that exclude pregnancy cover.

Top cover These are the best-value policies if you want to be fully protected.

  • They cover all treatments in a private hospital.
  • The premiums are top shelf, but if you take out a policy with an excess and/or co-payments they’re often not much more expensive than medium cover.

Excesses & co-payments

By choosing an excess or co-payment, you can save on your health insurance premiums.

An excess is an expense you pay out of your own pocket once per hospital stay.

  • Be sure to check how many times the excess applies per year.
  • Some policies do not charge an excess for children, for a day stay or for treatment after an accident.
  • The highest excess you can choose without becoming liable for the Medicare Levy Surcharge is $500 per year for singles and $1000 per year for couples and families, but there is no restriction on co-payments.

A co-payment usually applies once per day for a specified number of days such as five days per hospital stay.

  • Some co-payments have a yearly cap such as $500 or only apply for a private room.
  • Check how many times the co-payment applies per year.

Hospital gap payments

If you’re going into hospital, check your health fund has a gap agreement with that hospital before you go in or you could be liable for the kind of accommodation costs that celebrities pay for penthouses.

Medical gap payments

Speaking of exorbitant costs, your first foray into the world as a private patient, in a private or public hospital, will likely be welcomed by the confusing and potentially costly world of medical gap payments.

Under private hospital insurance, the government pays 75% of the Medicare Benefits Schedule Fee for each "item" that your doctor intends to charge for, and your insurer pays the remaining 25%. However, doctors are not bound by the Medicare schedule fee so they can, and often do, charge higher. The amount that doctors charge above the fee is known as the medical gap.

Some doctors have agreements with health funds to cover this gap. If your doctor recovers the entire medical gap from your health fund it’s a "no gap" agreement. Otherwise, if the doctor recovers some of the medical gap from the health fund and the rest from you, this is a "known gap" agreement.

  • No gap = good
  • Known gap = not so good, but at least your health funds covers more than the 25% and you know how much you’re paying
Medical gaps can cost you thousands of dollars, so make sure you find out if you are liable for a gap fee. The recommended top policies with $0 excess in our review have above-average coverage of no-gap agreements with doctors in that state.

Suspending your membership

Your health fund may allow you to suspend your membership if, for example, you go overseas or become unemployed.

  • In this case you don’t pay a premium and are not covered.
  • But your LHC rating stays in place, so you won’t have to pay a surcharge later on, when you can afford to take up hospital cover again.
  • The MLS can still apply depending on your income.
If your fund does not allow you to suspend your membership you can use your LHC’s “days of absence”, which allows a maximum of 1094 days (three years minus one day) of no hospital cover without affecting your LHC.

Cheap health cover for members

Check whether you qualify to join a restricted membership fund, which are available only to people who, for example, work in the education or defence industry. They often offer good policies at a lower premium than open membership funds, especially if you’re after top cover with no excess.

Family cover

Family cover generally includes your partner and children under a certain age. The age varies from fund to fund – it could be anywhere from 16, 21 or even up to 23. Some policies may include full-time students under 25 or other dependants. Check whether an extra charge applies.

Switching & waiting periods

If you switch to hospital cover that’s considered equivalent or lower than your existing policy (check with your health fund), the waiting period you served on your previous policy will be carried across.

Health-insurance-switching-infographic


family-on-beach

Do I need extras insurance?

The number one and most important question you should ask before buying extras insurance, whether it’s as a standalone policy or combined with hospital insurance. If there’s one thing you should take away from reading our health insurance buying guides it’s that a lot of people waste good money on insurance that they don’t use and we don’t want you to be one of those people.

Having said that, this buying guide is for people who have already decided they need extras insurance, so if you’re not sure extras insurance is for you then head over to our health insurance buying guide.

Is my current extras insurance policy right for me?

When it comes to extras insurance, many people are paying more in premiums than they receive in benefits. To work out if your extras health insurance is offering you value for money:

  • Request an annual claims statement, which shows the total benefits you received in the last financial year.
  • Compare the total benefit with your annual premium.
  • If, like many people, you have a combined extras and hospital policy, a bit of maths will come in handy. Select a standalone hospital insurance policy from your fund that’s comparable to the hospital cover in your combined policy (with the same excess and cover level), then deduct its price from the premium you pay. The difference will be the amount you pay for extras health insurance. Compare this premium with your extras benefits. Are you paying more than you’re getting in return?
  • The best place to find out about your policies is to check the standard information statement at privatehealth.gov.au
  • If you find your premium is substantially higher than the benefits you receive and you don’t anticipate your health needs will change any time soon, consider switching to a less expensive policy or cancelling extras, or ancillary, health insurance altogether. But note you’ll be subjected to waiting periods before you can make a claim if you take up extras again.

Tip: Health insurers often have specials that allow new members to claim straight away for many health services (although usually not the more expensive ones).

What type of extras insurance is right for me?

There are three levels of extras cover:

  • Budget – suited to healthy singles and couples. These are the least expensive extras policies but bear in mind they policies may exclude a wide range of services.
  • Medium – cover for families with young children and middle-aged singles and couples with average health care needs. Medium-level extras policies must cover general dental, major dental and endodontic and at least five other services.
  • Comprehensive – designed for families with school-aged children and mature singles and couples with high health care needs. If you’re simply looking for the ultimate in extras policies then look no further. These policies offer the best value for money for general dental, major dental, endodontic, orthodontic, optical, non-PBS pharmaceuticals, physiotherapy, podiatry, and psychology services.

Differences between budget, medium and comprehensive extras health insurance

Dental cover

The biggest difference among insurers is for dental cover – both the range of services and the maximum benefit offered. More than 50% of all benefits paid by extras insurers are for dental treatments.

  • If you only go to the dentist for general dental health services, such as check-ups, cleaning or a filling, a basic policy will likely be good value.
  • Major dental procedures such as bridges or crowns are normally covered by a medium- or top-cover extras health insurance policy.
  • If your children need braces or you or your partner needs a crown, a top-cover policy may suit you best.
Higher limits for glasses and contact lenses

The average optical maximum benefit for the policies we looked at in 2013 was:

  • $200 per person for basic and 
  • $250 for medium and top cover.
Higher combined total limits for all therapies
  • The annual limits for therapies such as physiotherapy, chiropractic, massage and natural therapies are often combined with basic policies. 
  • So, the total amount you can claim is smaller than with medium or top cover policies, which have separate limits. 
Maximum benefits

With the policies we looked at in 2013, the average total maximum benefits for all treatments per person was:

  • $1800 for basic
  • $4300 for medium
  • $7500 for top cover.
More therapies covered
  • Basic policies rarely cover you for podiatry or psychological treatment or medical devices such as a glucose monitor. 
  • While medium policies cover more therapies, annual limits are usually lower than for top cover. For example, the average cover for hearing aids with medium policies is $500, whereas top cover pays $800 on average. 

Extras health insurance tips

Look for percentage benefits

Rather than simply paying a fixed amount for a service, such as up to $30 for a physiotherapy session, some policies cover a percentage of your bill, usually from 60% up to 100%. This can be useful if you go to a dentist or other healthcare provider who charges above-average prices. Where these types of benefits apply, it’s worth checking and comparing your annual limits for the particular services with those of other policies.

Look for funds with provider schemes near you

A number of health funds offer provider schemes or even their own optical or dental centres. The fund will have negotiated a price (usually lower than the normal price) with, for example, the dentist or optical store, and will also pay a higher benefit to you. Full cover is sometimes available.

Check for loyalty bonuses

Some health funds pay higher benefits to loyal members. While this is good for you if you’ve been with them for a long time, it can be a disadvantage for new members since your time with another fund is not counted towards these bonuses.

Have you used your lifestyle cover?

Some extras policies offer services such as massage or gym classes and even sunscreen.

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