Benefits paid out by health insurance funds for ‘extras’ treatments soared by 50% over the last five years. Some $1.2 billion was paid out in claims for dental, optical, physiotherapy and other general treatments during January to March of this year; up from $800 million in the first quarter of 2010.
The number of Australians with extras cover only increased by 15% over the same time period, indicating that this meteoric rise is due to health funds paying out more, rather than because more people have taken out health insurance.
Abigail Koch, spokesperson for health insurance comparison service comparethemarket.com.au, said, “Consumers come to us with a common complaint – that they’re not getting enough value from their extras cover. Data shows that health fund payouts are increasing, so if you’re not getting as much money back as you had hoped, then you’re missing out. Now is the time to re-evaluate and switch to a policy that enables you to claim for the treatments you actually use.”
Comparethemarket.com.au gives 6 tips on how consumers can ensure they are getting their money’s worth from their extras cover.
- Clear value in a new pair of specs – if you have optical cover then it will typically include an annual limit on claimable returns for prescription glasses or contact lenses. You pay for your health insurance every year, so make sure you claim for a new pair of glasses every year. There are some fantastic deals around so your out-of-pocket expenses will be minimal – or with some funds zero – and you’ll have some spare glasses just in case, and importantly, you’ll be making the most of a benefit that is rightly yours. “Unlike hospital cover which is more of a peace of mind product, there is real and immediate value to be found in extras cover and if you are not getting money back then you are missing out,” said Abigail.
Benefit: Two pairs of designer glasses each year from $199
Out of pocket: $0 (if you are with certain health funds e.g. Bupa and HCF)
- Don’t put your money where your mouth is – some funds offer 100% back on certain dental work, typically diagnostic and preventative treatment such as your regular check-up which includes scale and cleans and fluoride treatments. This could include two sets of treatment for each person on the policy each year depending on the health fund. This means if you have no major dental work coming up, then this type of cover could pay for a family’s dental needs for an entire year without any out-of-pocket expenses. “It is so important that consumers draw on the ‘Bank of Benefits’ that is given to them when they take out their extras cover,” said Abigail.
Benefit: Up to two free dental check-ups, scale and cleans and fluoride treatments for everyone named on the policy per year
Out of pocket: $0 (depending on your health fund if you use their preferred providers)
- Eliminate out of pocket expenses – the difference between the benefit your health fund pays you and the cost of your treatment is known as the out of pocket expense or the gap. Some funds enable you to avoid paying this altogether by offering ‘no gap’ cover or 100% claim back options. Typically, to avoid forking out your own cash, you’ll have to use the fund’s preferred provider. So when choosing an extras policy, double check if they have any preferred providers in your area.
Benefit: No more out of pocket expenses
Out of pocket: $0 if you have no gap cover and stick with participating treatment providers
- Spending to manage your costs – the way you use your extras policy can determine the cover that is most valuable to your needs. A frequent user may be better off with a policy that gives a set amount back per treatment (e.g. $29), as opposed to a percentage of the cost (e.g. 60%). Someone that visits the physio every week could be better off choosing a policy that pays back a set amount for each visit as opposed to a percentage of the cost, as with a set amount they can spread their payments over the year, claiming a small portion back each time. Though percentage pay backs may be higher – and appear more attractive – they eat up the limit much more quickly leaving you without support for the rest of the year.
Benefit: Manage your costs by being able to claim each time you visit your physio
Out of pocket: Depends on the cost of your treatment
- Who needs a debit card when you’ve got a HICAPS card – many consumers fail to claim for their entitlements because they think it is going to be an administrative nightmare. HICAPS is a service which enables you to swipe your health membership card to claim automatically on the spot at your health service providers. “Treat your membership card as if it was a debit card – swipe and move on. It’s immediate; there will be no more waiting around for your health fund to deposit your benefit into your bank account,” said Abigail.
Benefit: No paperwork, no more waiting for your money back
Out of pocket: Depends on the type and cost of treatment
- Don’t limit yourself to sub-limits – finding value in your extras policy requires a certain amount of flexibility. When choosing or reassessing your cover, many consumers are able to claim back more money with policies that set an overall limit for an entire type of treatment (e.g. $300 for optical-related products) as opposed to sub-limits for individual services (e.g. $200 for multi-focal lenses and $100 for single vision lenses and frames. Sub-limits are restrictive and could prevent you from getting as much money back as you deserve.
Benefit: Flexibility, more likely to completely exhaust your limit
Out of pocket: $0 on certain treatments / with certain funds
“Health funds are currently posting tax statements to their members, which should include a detailed claims history. Use this to work out if you are getting value for money from your extras. Chances are there will be a heap of treatments in your policy that you haven’t touched all year. If you eliminate things you don’t need then you may see your premium drop. If you’re confused then call a health insurance specialist who will be happy to discuss the best ways you can get your money’s worth from your extras cover,” said Abigail.