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What to Consider When Buying Health Insurance

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It can feel like a complicated process when it comes to choosing private health insurance. You will need to understand which products offer the best benefits, but the process does not need to be that complicated. If you are willing to do a little research and some planning, you should be able to select coverage that works for your situation. Here are some of the things that you should consider when you are looking for insurance:

Select coverage for the services that you will use.

No policy is perfect for every person when you are looking at private health insurance. You want to find a policy that includes services you will use or think you may need in the future. There are four tiers of health insurance categories and that makes it easier to understand the treatments and services offered by private hospital insurance policies along with what might be excluded. Some of the services you may rely on could be under basic coverage levels which could be a lot less costly than products under those higher tiers. Coverage under higher tiers could be an option for you and can offer you more peace of mind. You could have a combined policy which would include hospital and extras under one coverage. The starting point is to have a discussion with your doctor to discuss what services you should ensure you have coverage for, and which ones are not required.

Find out the Amounts you can Claim and When you can Claim them

If you are obtaining private health insurance for the first time or want to upgrade coverage from a basic level, then you should know there will be a waiting period each time you increase or take on new insurance. This is in place to prevent people from signing up to a policy and making claims right away, then cancelling before they have to pay a premium. This behaviour is what increases costs for anyone who needs insurance. You will need to look at annual limits imposed by your policy and claims allowed for each service within a 12-month period.

Make Adjustments to Private Health Coverage for Affordability

You have the ability to adjust various aspects of private health insurance to ensure that your premiums are affordable. You can consider if you want to pay a higher excess to reduce premiums. You could have a co-payment or what you would agree to pay for each day you are a patient. There are many options, but it is up to you to decide what works best for your situation.

Are There any Discounts or Rebates Available?

The federal government encourages people to have their own health insurance because it helps to ease the burden on the public healthcare system, particularly if you receive treatment in a private hospital. There are some incentives that the government offers to encourage you to sign up for coverage from a private insurance company, including:

    • Rebates – if you take out a hospital or combined policy you may be entitled to a government rebate to assist in your premium payments. Rebates are income tested and can be deducted from premiums or as a tax deduction.

    • Discounts based on age – if you are between the ages of 18 and 29 you are eligible to receive discounts on hospital policy premiums

How will Private Health Insurance Impact my Taxes?

There may be levies imposed if people do not have appropriate levels of coverage. If a person does not have private hospital insurance before their 31st birthday they will end up payment more for that coverage if they decide to take it out. This is called loading and two per cent is applied for every year you do not hold coverage after your 31st birthday. Medicare levy surcharge is applied to high income earners if they do not have a hospital coverage policy in place. This is on top of the Medicare levy which is paid by the majority of taxpayers.

Consider Your Life State When You Choose Health Insurance

You need to decide what type of health insurance is the most appropriate for your particular needs. In deciding what type of policy will work best for you, these questions should assist:

    • * Is insurance required for children or spouses?

    • Do you have pre-existing health conditions which might require treatment in future?

    • Are there familial health conditions which might impact you?

    • Which services will you need to access as you age?

    • Are you planning to start a family and will need access to obstetrics?

Private health insurance should offer you more options, but you will need to ensure that you have the proper coverage in place for what might arise.

Do You have Ambulance Coverage?

Ambulances are not free in every state and territory of Australia. You may need ambulance coverage to cover the bill, or you may be faced with expensive out of pocket expenses if you need an ambulance.

It is important to regularly assess your need for excess coverage and which portions of that coverage you specifically require. If you experience a significant increase in your premium policy, then you may need to reassess your coverage. You want to ensure that your coverage is effective for the services you need and if there are services that you do not use, perhaps those can be eliminated from your policy. Remember, you can contact an agent to discuss your needs for excess coverage, it is their job to help you get the coverage that suits you best.

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