It’s that time of year when we get slugged with increases in the premiums for private health cover. Interestingly, in the latest Choice survey of 1,000 Australians, health insurance has now overtaken electricity as the main household cost concern!
Here are a couple of tips to save you money on private health cover.
Review your Extras Cover
Many people hold a combined health policy, which includes both private hospital insurance and cover for a range of “extras”, like dental, podiatry and reiki.
In fact, most people do not need the extras cover and this is where the insurance companies make a large portion of their profits. In order to find out if you are getting value from your extras cover, follow these three simple steps:
Step 1: Call your fund and request an annual claims statement. This will give you the dollar amounts of what your policy has paid out in the last year in non-hospital extras (dental, physio, etc). It will give you a total benefit amount for the year.
Step 2: Ask your fund the following: “If I switched to a comparable ‘hospital only’ policy, how much would I save each year?”
Step 3: Calculate the difference.
The chances are you paid far more in your annual premium than you got back – this is why I cancelled my extras cover!
Switch Policies
Private health insurance policies are complex and not easy to compare when it comes to assessing value. The government has done a pretty good job of helping consumers by setting up an independent comparison site (www.privatehealth.gov.au). This site also has good information to get you up to speed and most importantly, it is unbiased and will give information on every policy in the market.
Keep an eye out for health insurers that are member owned. Any profits in the member-owned funds flow back to members in the form on lower premiums, so often you can find better value. There is a dedicated website (www.membersown.com.au) that covers most of these funds with a phone number to call for advice.
Choosing the right policy will be specific to your needs, but you do not need to pay the insurers any more than necessary to beat the price increases – good luck!
The information provided should not be considered personal financial advice as it is intended to provide general advice only. The content has been prepared without taking into account your personal objectives, financial situations or needs. You should seek personal financial advice before making any financial or investment decisions.