Changing your excess: How to reduce the cost of your health insurance premium
Maximum excess limits have increased, giving you more choice
When it comes to private health insurance, there's no shortage of jargon to get your head around. Even the most commonly used terms can be confusing. At nib, we believe that understanding your cover should be simple; so, we break down some of the most complex terms for you.
When you take out or upgrade a policy, you may have to wait for a set period before you can claim certain benefits. We could call this 'The Time It Takes 'til a Benefit Kicks In', but we’ve chosen to stick with the industry standard which is, you guessed it, 'waiting period'.
As the cliché goes, 'all good things must come to an end' - even the benefits of private health insurance! Your annual limit is, quite simply, the maximum amount per calendar year (from 1st January – 31st December) that your policy will cover for specific goods or services.
No, this doesn't refer to the number of parties you're invited to, or clubs you're allowed to join. Inclusions refer to everything covered as part of your policy, and exclusions are those that aren't. These will vary depending on your level and type of cover.
For most people, any time they spend in hospital feels excessive, but that's not what this means. This is the amount you have to pay upon admission to hospital and it will vary depending on your policy.
This type of gap is not something you'll fall down, it means an out-of-pocket expense, that is, an expense that isn't covered by your policy. This could include accommodation costs at a non-nib agreement hospital or medical fees above what's covered by the MBS (Medicare Benefits Schedule) or nib Medigap Scheme fee. The gap will be billed to you by your provider, and it's best to check up-front what the potential out-of-pocket expenses may be.
This is a tax, basically. If you are an Australian tax payer who doesn't have private hospital insurance, and you earn over a certain amount, you may have to pay extra. We're talking 1% to 1.5% per year. The ATO has a private health insurance rebate calculator as well as a Medicare levy calculator to help you work out how much that is, based on your income.
If you take out private health insurance with nib, the federal government may contribute towards some of your premium; this contribution is called the Australian Government Rebate on private health insurance. The percentage of this rebate is set each year and varies according to age and income.
Like learning hip hop or a second language, taking out private hospital insurance is best done when you're young. LHC encourages you to take out hospital insurance early and maintain it. If you wait until after the first of July following your 31st birthday to take out hospital cover, you'll pay a 2% loading on top of your premium for every year you wait and the loading applies for 10 years of continuous hospital cover. The maximum loading for LHC is 70%.
If you buy a slice of cake at a cafe, that's all you get. The rest of the cake stays behind the counter. Likewise, if you take out a lower level of cover, you may not be covered for some treatments. Or you may only be covered for some of the cost in certain situations. For example, if you go to a private hospital for treatment that is a restricted service or benefit on your hospital policy, you will have a higher gap payment than if you receive treatment as a private patient in a shared ward of a public hospital.
When you buy something, you usually want to know the price before you make a commitment. Hospital and medical treatment is no different. You should be informed in writing about the cost of treatment before you are admitted to hospital or treated by your specialist.
Were you in another health fund before nib? This certificate shows your age when you took up the cover, the length of your membership, the level of cover, any waiting periods you have served and claims made in the previous 12 months.
These are just a few of the common terms, but if you are unsure about the language in your policy, you can always contact us or call 13 16 42. Alternatively, if you want to check any of the details of your current policy, log onto Online Services.