The Top 5 Mistakes People Make With Their Health Insurance
Health insurance has been introduced to protect you financially and ensure you always have good access to essential medical care whenever needed. But too many Australians make mistakes unknowingly that may cost them thousands of dollars in unnecessary costs or feel like they are stuck on poor cover. Here’s a lowdown of the five biggest errors that policy holders make with their private health insurance.
1. Going with the cheap policy without even considering what is really covered.
This is the major blunder you would do best to steer clear of when choosing a health insurance policy. If you think that all things are backed by price without even knowing what is included then reconsider. Although cheaper premiums may appeal initially, it might mean that you are less covered than you believe you are.
Lower cost policies will have much more limitations & exclusions, which is to say they will not cover important treatment or services when you need them most. Basic hospital cover for instance generally leaves more serious procedures including joint replacements, birth related treatments and pregnancy, cardiac surgery and major operations. If by chance you find you need these procedures, a Basic policy will have you facing massive out-of-pocket costs in most instances.
2. Remaining on old or closed policies
Another problem is that there is a pattern of maintaining the same policy for an excessively long period without revising or amending it. Health insurers will roll out new products every two to three years, aligning their policies with the latest trends in healthcare and increasing the rebates to catch up with escalating medical expenses. Older policies, particularly those which have closed or are legacy ones that are now no longer open to new customers, don’t see the advantage of such updates. As a result, their benefits remain static while premiums keep rising.
Remaining committed to these archaic policies can hugely depreciate your worth over the years. But on the other hand, periodically reviewing and benchmarking your health insurance ensures you will be acquiring the newest benefits, rebates that mirror real medical expenses, and premiums based on your current economic conditions.
If you’ve been on your current policy for more than three years without reviewing it, it’s probably time to compare and switch to something more suitable for your current needs.
3. Ignoring the importance of extras cover
Too many Australians downplay or overlook extras cover as an unnecessary expense. Perhaps you believe it’s simply an added luxury rather than a useful necessity. Whatever the reason, extras cover can prove to be extremely useful because it covers non-hospital healthcare treatments such as dental, optical, physiotherapy, chiropractic, podiatry and even mental health.
The error in this case is either refusing extras cover altogether or purchasing a policy that does not suit your healthcare needs. Without having an adequate level of extras cover, you may end up facing lots of surprise (and costly) out-of-pocket expenses for regular items such as visits to the dentist or prescription glasses.
That’s why you must opt for extras cover according to how much, in reality, you need healthcare. Frequent use of services – let’s say that’s optical and dental treatment – may warrant a more extensive extras package. Conversely, services that you never (or hardly ever) use may not warrant any cover, and that is because you can get by with saving a couple of dollars in premiums. Aligning your extras policy with your actual usage patterns can see you achieve the best value for money.
4. Lack of knowledge about waiting periods and gap payments
The other frequent mistake is misinterpreting or overlooking waiting periods and gap payments. Waiting periods are set time limits during which you can’t claim any benefit after the purchase of a new policy or a step-up to a higher level of cover. It’s simple to fall into the misconception that your new policy will provide instant cover, which is not always so – especially for pre-existing conditions, pregnancy and elective surgery that may have waiting periods of 12 months.
5. Not comparing policies from time to time
Perhaps the largest and the most critical error of all is failing to regularly shop around and compare what you have with new products available. Our healthcare insurance market is super competitive, and insurers go to a great deal of effort to change their products in an effort to entice new members. If you don’t spend a few minutes shopping around and comparing what is available, you are passing up some excellent opportunities to save money or even enhance your cover for not a single cent more.
Conclusion
Knowing about these common health insurance mistakes and taking the time to compare your options can mean you’re always getting the best possible cover at an affordable price. If you’re ready to get started then reach out to the experts at Utility Market today and we’ll take care of the rest.
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