How Today’s Market Makes Comparing Health Insurance Easier Than Ever
For most of us, comparing health insurance or changing to a new fund seems like the total agony if you’ve already been with the same insurer for ages and haven’t had any issues. But what most people don’t know is that the private health system is designed to make the change simple and trouble-free.
Approximately 15 million Australians have private health insurance, and a significant portion of those have remained on the same policy for a decade or more. While that loyalty may be comforting, it may have a price tag. Older policies are often closed to new members because they contain out-of-date benefits but continue to trigger yearly premium increase.
While cost-of-living pressures are sharp and health demands are shifting, it’s time to ask is your health fund still working for you? The strength of portability perhaps, the most customer-friendly aspect of the Australian health cover system is the portability rule. It’s under the Private Health Insurance Act 2007 and ensures that if you change to a new policy with equal or lower cover, you don’t lose your hospital or additional waiting period.
Comparing health insurance is simple
Let’s imagine you’ve already completed the waiting periods for major dental and joint replacements on your previous policy. When you shift to an equivalent or lower-level policy with another fund, those benefits transfer, so if you have to have treatment, you’re covered immediately.
In short, it means there are no penalties for switching to a new health fund when you get better value elsewhere. Why so many Australians stay on outdated cover. A large number of people are still paying for health insurance policies that no longer give them good value. These are policies that are no longer open to new customers but stay active for existing members. Closed products can be problematic for a number of reasons:
- You’re still stung with annual premium hikes, usually every April.
- The rebates and bonuses don’t escalate to catch up – or may even reduce.
- Extras limits remain locked at historic levels irrespective of increased healthcare expenditure.
- They weren’t created with your present health care requirements in focus.
New products become available regularly
The majority of health funds introduce new products every two to three years to ensure they keep pace with their consumers’ latest needs, new treatments and shifting industry trends. These products typically contain:
- New mixes of clinical categories.
- Improved inflation alignment.
- Updated extras benefits and cap.
- Choices for various life stages.
You could be paying too much for too little
As health insurance brokers, we meet everyday Australians, who believe they are paying excessive premiums and receiving little in return. This is particularly common for individuals on legacy products with benefits that are frozen.
Take extras cover for instance. You could be on a policy that pays out $300 annually for physiotherapy, but you’re paying premiums which have increased by 4% or higher each year. While this, new products have increased limits or combined family caps for comparable or even lower premiums.
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