Samantha, 55, family policy
Samantha has cover for her husband and three dependent teenage sons. Recently she received a letter from her health fund explaining the reforms and the resulting changes to her cover.
"Your article on the health insurance shake up has prompted me to reach out. I'm really quite bewildered by the reasons behind the changes.
Am I better off putting the $5000 aside each year to self-fund future medical treatment?
"As of 1 April 2019, my annual premium for my policy is rising from $5000.27 to $5217.13. We can barely afford this now. I doubt this was the intent of the reform.
"After decades of paying for private health insurance and claiming very little (on average we claim less than 10% of our policy premium each year), I'm angry. Am I better off putting the $5000 aside each year and self-funding future medical treatment?"
CHOICE health insurance expert, Uta Mihm, says
You're absolutely right, Samantha, it is quite confusing and the price rises in premiums mean they can become unaffordable. Here are some things we recommend you do:
- Consider the advantages of hospital insurance over self-funding
All Australians are entitled to free treatment in public hospitals. Hospital insurance allows you to choose your own doctor, go to a private hospital (which some believe have better conditions and service) and access shorter waiting lists for so-called "elective surgery" which basically means surgery for a condition that isn't immediately life-threatening. It can be very uncomfortable waiting for surgery and your quality of life can be limited. You may be having trouble walking because you're waiting for a hip replacement, for example, or you're losing your sight waiting for cataract surgery.
The other reason to take out hospital insurance is for tax and government surcharge purposes. Check if you'll get money back at tax time by keeping hospital insurance.
Extras treatments are usually much less expensive than hospital treatments so you can normally afford to pay for them yourself.
If you're only claiming $500 per year (for things such as visits to the dentist and other ancillary services such as a pair of glasses or physio), you are likely paying more for your extras insurance than you're receiving in benefits. Check your annual claims statement to see if this is the case (you can get your claims statement from your online account at your health fund's website or you can call them to request one).
To find out more about the reforms and what you need to do, visit Five big changes to private health insurance.
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