Who pays for what when it comes to your medical bills?
A simple guide on who's responsible for healthcare costs
Comparing your private health insurance options can be an overwhelming experience but it's important to remember it's not all about price when choosing the policy best suited for you.
While you should consider how much you're willing to spend on the right cover, there are other factors to keep in mind when you're looking around. For starters; private health insurance is made up of two parts - 'Hospital cover' and 'Extras cover' - and you're able to buy them separately, tailored together to fit your needs or pre-packaged.
To help find the option that's right for you, think about why you want private health insurance and check your policy to see if it includes the health and medical services you want. Is it for a specific health issue, to keep your accountant happy, to give you more choices in your healthcare, or maybe just for peace of mind to help pay hospital and medical costs not covered by Medicare? Even if you only want cover to avoid the Lifetime Health Cover loading, make sure you can get some value out of it by including cover for services like dental and emergency ambulance.
To compare your Hospital cover options, start by considering your personal circumstances and if those may involve an operation or hospital stay in an Australian hospital or day hospital, make sure the cover you're looking at includes this treatment and check with your insurer what out-of-pocket costs may apply. Private patient hospital cover is also what you'll need to avoid the Medicare Levy Surcharge (if your taxable income is above certain thresholds) and Lifetime Health Cover loading (which means you will pay higher premiums if you take out private health insurance after turning 31).
If you have an existing medical condition, you'll still be able to take out health cover but you may need to wait longer to have any related treatment covered. Be sure to take note of waiting periods and become familiar with pre-existing conditions so you don't end up disappointed with your cover selection later on, and consulting your doctor may assist when considering your health needs.
Another thing to consider with comparing Hospital cover is your excess. This is the amount you'll need to contribute if you have to go to hospital – the lower it is though, the higher your premiums are likely to be. For example, nib's Basic Hospital cover has an excess of $500 to keep your regular payments down.
Same as you did with your Hospital cover comparison, when you start to compare Extras cover options, shop around and consider which services you may want cover for. Extras cover can include items such as dentist and optometrist visits, as well as things like physiotherapy or chiropractic treatments and hearing aids.
Once you have checked that the services you want are included in the cover you're looking at, confirm if any waiting periods apply and take note of the annual limits. Your annual limit is the total amount you'll be able to get back from your claims on that particular service over the year. Different limits may apply depending on your level of Extras cover.
As you compare Extras covers, you'll probably notice the "percentage back" varies from cover to cover. This percentage back refers to what amount from the total cost of your service you'll get back from your health insurance. If you were on Core Extras and went to see a physiotherapist for example, you'll get 60% back on the cost of your visit.
More information is also available on the government's privatehealth.gov.au website.
No one likes paying for things they don't use so you'll be happier if you choose the best cover for you, rather than just picking the cheapest one or the first one you see. Make sure you keep comparing as your health needs (and those of your family) change. So it's worthwhile to take the time to get comparing, and consider the potential benefits for you.