08.How to compare products
You can compare health insurance for free using the government's health insurance calculator. The database features all health insurance policies available and allows you to search various levels of cover. There are also some commercial health insurance comparison services, which typically operate on a pay-per-acquisition basis - when you sign up to a provider using their service, they receive payment.
While CHOICE would like to see the continuing improvement of aggregator services, we also warn consumers to consider the entire market when choosing a health insurance product - otherwise, you may not end up with the right product for you or one that is good value for money.
Before comparing health insurance for yourself, it helps to understand the language and some health insurance basics. You'll find a lot of this information on this article, or check out the brochures available from the Private Health Insurance Ombudsmen.
To compare hospital insurance, you need to decide on the level cover you require that is also within your budget. Generally, if you're young with low risk factors, you may want to consider a basic hospital insurance product. This will usually restrict procedures such as cataract surgery and joint replacements, but will cover your for other services or in the event you have an accident and can later be transferred to a private hospital (in an emergency, chances are you will end up in a public hospital but you may be able to transfer later).
Medium level cover is often as expensive as top level cover, so choose carefully and make sure any savings are worthwhile. For those on a budget but still looking for top cover, you may be able to add an excess to a top level policy to save money on your premium. Top cover with no excess reduces budget surprises, especially for an active family with more than two people on the policy (therefore increasing the likelihood of a claim).
Once you have a rough idea of the level of cover you would like, you can then visit the privatehealth.gov.au website, and begin to compare policies in your area. Some tips to keep in mind:
Check the policy details on the Standard Information Sheets, which you access by clicking on a product after you have completed a search.
Watch for restrictions and exclusions. A common mistake people make is believing they will not need a restricted procedure, such as medically necessary plastic surgery. However, in the event of a bad accident (for example), you may be left disappointed if it turns out you need the cover after all.
Consider the out-of-pocket ratings, and check what arrangements an insurer has with your local hospital and doctors. This can save you having to pay a gap
in the event of a claim.
When you find a policy you like, request a copy of the Product Disclosure Statement (PDS) and spend some time understanding the fine print. If you have any questions, you can approach the insurer before you buy.
Use extras health insurance as a budgeting tool for non-hospital treatments that aren’t covered by Medicare — for example, dental treatment, physiotherapy, glasses and contact lenses, plus less common treatments such as acupuncture and podiatry. Some extras policies cover complementary treatments like massage. You can compare policies using the government's private health calculator, including policy details by clicking on a product and viewing the Standard Information Sheet (SIS).
Some tips to keep in mind:
The level of cover you need all depends on how much you expect to claim. If you don't use a lot of services, basic or medium cover may be enough. If you have a family with kids that play sport and also may need things such as orthodontics, you might be better off considering top level cover.
Check out what services are included, the maximum annual limits (after waiting periods) and the sub limits. The maximum limits are fairly self explanatory, but with more people on a policy making claims, you have more chance of reaching the limits. The sub limits restrict how much you can claim in a single visit.
Usually, waiting periods apply before you can make any major claims. However, sometimes insurers will waive waiting periods as part of a promotion.
Some funds restrict the overall limit by combining the maximum limits — for example, saying you can have $400 worth of physiotherapy and chiropractic in a year instead of $400 for each. This restriction can mean very large differences in how much you’ll get. It’s also worth noting the difference between family limits and single limits. Some policies limit the number of times a family can claim for some services.
Some funds increase limits every subsequent year you are a member (set to a maximum amount). This rewards member loyalty.
Orthodontics often has a maximum lifetime limit - the most you can claim for this service while ever you are with the provider. Hearing aids and other devices may have similar restrictions - you may only be able to claim on one every couple of years.
Check whether the health care provider of your choice (such as an acupuncturist) is covered by the fund. Some funds have preferred providers, but that doesn't mean all services are covered in full. Always check before getting a procedure, and don't be afraid to seek a second opinion.
CHOICE also recommends extras policies as part of this guide. However, you should also make any purchasing decisions on your individual scenario.
What about combined?
Combined polices are a package offered by insurers that cover both hospital and extras. While this is no doubt convenient, CHOICE has also found that combined insurance often has at least one component lacking in quality compared to what is available when shopping for each level of cover individually. Not all combined packages represent poor value, but we have not recommended combined policies this year and are recommending that the many people with combined insurance take this opportunity to assess what they are paying against our recommendations.
Different rates for different people?
Health insurance operates on a community rating system. That means that everyone pays the same premium regardless of age or your current state of health. However, the system does employ various methods to ensure it remains fair and viable, such as waiting periods and the lifetime cover loading of 2% for every year over the age 31 that you do not have health insurance. You normally have to wait 12 months before receiving treatment for a pre-existing condition. The rates are then organised to the number of people on the policy. There is a rate for singles, couples pay double and families with dependants (read children) pay the same as couples. Some policies allow you to include adult dependants still living at home for an additional premium.
Since 2007 new rules enable health funds to discount policies for single parents. Discounts vary between funds and policies, so if this affects you, shop around for a good deal.
If there’s no difference in cost, couples may be better off choosing a family policy. That way they won't have to alter their cover if they start a family.
The 'bells and whistles'
Many funds have other features, including their own dental or optical clinics that entitle you to a higher benefit, ambulance cover included with extras cover, cover for Chinese herbalism or massage therapy. If you want some particular extra features, this may be a factor in which fund to choose. However, read the brochures carefully and check if the fund is more expensive than one without the trimmings, especially if you don’t think you’ll be using them.