In April this year, the cost of private health insurance premiums in Australia increased by a weighted average of 5.59%, taking the total increase over the past four years to over 25%. That makes it more important now than ever to separate myth from fact about health insurance before you purchase.
“Understanding how health insurance works, and determining what cover will best suit your needs, can be a complicated task but it’s important that people educate themselves about the industry and their options so that they don’t short-change themselves,” said Abigail Koch, spokesperson for health insurance comparison service comparethemarket.com.au.
Here, we clear up on some common health insurance myths.
Myth 1 – “We don’t need private health insurance, Medicare will cover it all”
FACT: Although the government covers most medical services through the Medicare system, Medicare only covers a certain amount of the cost. This includes free or subsidised[i] treatment by health professionals, free treatment and accommodation in a public hospital and 75% of the Medicare Schedule fee for service and procedures if you are a private patient. If you don’t have health insurance, you might also be liable for the Medicare Levy Surcharge. And while Medicare will cover certain costs, having private health cover gives you greater control over your choice of hospital and doctor.
Myth 2 – “I’m healthy so getting private health insurance would be a waste of money”
FACT: Being fit and healthy doesn’t mean you won’t get injured or have an emergency. Health insurance can help you financially in all types of circumstances. From having your tonsils removed, breaking a bone, or getting ill. If you purchase an extras policy, you’ll get access to a range of non-hospital benefits too, such as dental, optical, physio and remedial massage.
Myth 3 – “I’ve found a health insurer, so I don’t need to change my policy”
FACT: As we grow older and our lives change, our health needs change too! As your life changes it’s always a good idea to review your insurance to make sure you’re appropriately covered. It’s also worth seeing what new products are on the market from time to time.
Myth 4 – “Private health insurance is only for rich people”
FACT: There are a range of policies available at different price points and for most of us trying to balance our budgets, the impact of a health issue could cause serious and ongoing financial harm. That’s why the majority of Australians who have the best private health insurance policy are earning an income level close to the national average[ii].
Myth 5 – “All health insurance policies cover pregnancy care”
FACT: Health insurers aren’t legally required to cover pregnancy care, and it’s a commonly restricted condition in many health insurance policies. In particular, many cheaper policies exclude birth-related services to keep premiums down[iii] .
If you need to change your policy to get covered for pregnancy care, remember that there will be a waiting period with your new fund.
Pregnancy services aren’t the only common exclusion either. Some of the other conditions that can be restricted from health policies include major joint replacement surgeries, eye procedures, cardiac surgery, cosmetic surgery and reproductive services.
Make sure to check your policy to see what treatments and services you are insured for.
Myth 6 – “Once you get health insurance, you’re stuck with that provider until your contract is up”
FACT: Health insurance policies are contract-free which means you can switch at any time. Many people don’t know that they’re not tied into their health insurance policy for a set amount of time. You can change your health provider any time and, subject to your claims history, your policy will refund any premiums you’ve already paid in advance. Some health insurance funds also give you a 30 day cooling off period when signing up. If you change your mind in the first 30 days after joining and you haven’t made a claim, then you may be able to get a refund on any contributions you’d paid.
Comparethemarket.com.au is a comparison website that makes it easier and quicker for Australians to compare and buy products and services they rely on in their everyday lives. Whether you’re looking for a good deal on your car insurance, health cover for you and your family, the lowest fuel prices in your area, or an energy provider that suits your needs, then go to comparethemarket.com.au. It’s a completely free service and enables Australians to make purchasing decisions with greater knowledge, confidence and savings.