Consumers encouraged to shop around for right insurance, not panic buy.
The number of Australians with private health insurance could surge if the Commission of Audit’s recommendations are picked up by the Coalition government in next week’s Federal Budget.
Huge numbers of high-earning Australians will turn to private health insurance in an effort to avoid the increased proposed Medicare levy surcharges, which in some cases will triple.
Data shows that more than 1.6 million Australians earn over $88,000 and of these, 224,000 currently don’t have private health insurance. This means they could be charged between 3 and 3.5 per cent of their income if the Commission of Audit’s recommendation is included in the Budget.
“The proposed levies recommended by the National Commission of Audit are prohibitively expensive and will result in a large majority of those earning over $88,000 taking out health insurance as a priority,” said Grant Waldeck, spokesperson at comparethemarket.com.au.
“Many Australians are already shopping around for private health insurance as 30 June is fast-approaching and people are considering their health insurance options before the end of the financial year in order to avoid a higher-than-necessary tax bill.
“We encourage consumers to consider carefully their health needs and compare policies based on their features and benefits, not just on their premium prices. Consumers should pay particular attention to extras as this is where they can tailor their requirements and get the most value from their policies.”
Comparethemarket.com.au’s top tips for getting the most out of your private health insurance:
- Remember to claim. The cost of your private health insurance overall is a balance between the premium and your potential returns through claims. “You must claim to ensure your return on investment, particularly with Extras policies,” Grant says. “When making a booking with your healthcare provider, check they offer HICAPS – this gives you an immediate claim. The risk of claiming at a later date is you might forget altogether – which we think many do.”
- Know a policy’s returns in potential claims before buying. “When speaking with policy holders, we find most people forget what they’re insured for and what amount they can claim back,” Grant says. “For these, the cost of private healthcare becomes a liability, not a benefit. You cannot buy private health insurance and file it away.” When assessing the value of a policy, know the services you claimed for in the last 12 months, how often you claimed, your spend on health services which you didn’t or couldn’t claim for, and any new services you might want to claim for in the following year.
- Take advantage of discounts. Some funds will discount premiums by 4 per cent for direct debit payments, while others will discount by 4 per cent for annual payments and 2 per cent for bi-annual payments.
- Look out for promotions. Some health insurers will offer the first month of cover for free for a limited time, while others waive waiting periods so you can claim straight away on some services.
- Switch and receive a refund from your old policy. “Many people don’t know that, with health insurance policies being contract-free, they can switch at any time, and their old policy will refund any premiums paid in advance. The new policy will start the day after the old policy ceases,” Grant says.
- Have someone support you to compare. Comparethemarket.com.au is Australia’s leading health insurance comparison website, comparing 13 award-winning health insurance brands, and over 13,000 health insurance policies. Choosing the most suitable policy and knowing how to maximise the benefits can be daunting so visit comparethemarket.com.au and let our health comparison experts help you find the best policy to suit your needs.