Parenthood is an enormous responsibility. Raising your children and watching them grow carries many highs and lows. After all, ensuring the health, happiness and wellbeing of your children was never going to be easy!

There’s no way to predict when you or your kids might become sick or suffer an injury, but you can take some steps to prepare for such circumstances. This is where private health insurance comes in.

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Hospital cover for families

Forking out for necessary surgeries and procedures is a heavy financial burden for any family to tackle. Luckily, Medicare can offer a helping hand by allowing your family members to be treated as public patients in a public hospital.

However, Medicare does not cover your admittance as a private patient. Nor does it cover emergency transport (i.e. ambulance). Furthermore, only having Medicare might mean you or your family will have to sit through a long public waiting list.

How hospital cover works

Hospital cover helps you with some (or all) of the costs of being treated as a private patient, at either a public or private hospital. This includes in-hospital treatment, as well as other costs (e.g. accommodation/theatre fees). If you’re insured, Medicare will cover 75% of the cost of medical services, while your health fund covers the remaining 25%. If your doctor charges above the Medicare Benefits Schedule (MBS) fee for your treatment, you will have to pay the extra cost. This expense is known as “the gap.”

The four levels of hospital cover

  • Top: covers all services where Medicare pays a benefit.
  • Medium: covers any service in the basic classification. However, it may exclude or restrict one or more of the following: pregnancy & birth related services, assisted reproductive services, cataract & eye-lens procedures, joint replacements, hip replacements, dialysis for chronic renal failure, and sterilisation.
  • Basic: may exclude or restrict one or more of the following – cardiac and cardiac-related services, non-cosmetic plastic surgery, rehabilitation, psychiatric services, and palliative care.
  • Public: covers default benefits for treatment in public hospitals only.

Even top level cover can come with certain exclusions and restrictions. For example, most policies won’t insure you for medical procedures or surgeries that aren’t necessary in maintaining your health, such as elective cosmetic surgery. For more detailed information on what is and isn’t covered, refer to your Policy Brochure or contact the insurer directly.

Why take out health insurance for your family?

It makes sense to have all the health needs and priorities under one roof neatly and collectively accounted for! A family health insurance policy covers you, your partner and your children.

For example, if you plan on having more children, private hospital cover lets you choose your own doctor or stay in a private room (so long as one is available). If you wish to have your baby as a private patient, the waiting period is 12 months. This means you’ll need to take out cover before you conceive in order to enjoy coverage. Many basic hospital policies will not cover these services, so you’ll also need to shop around for higher levels of cover.

  • A financial safety net for serious & minor health issues. This is something many Australians eagerly seek out.
  • Trying to save money for your children’s future, your retirement, or both? The possibility of having to fork out funds for expensive healthcare is not ideal.
  • Avoid public hospital waiting lists. One thing kids don’t tend to do well with is wait. If you can skip public hospital waiting lists, you’ll be a happier parent.
  • Need help paying for out-of-hospital services? Whether it’s dental checkups or trips to the physiotherapist, parents can appreciate the value of general treatment cover.

When it comes to tailoring cover to suit your family’s priorities, it’s simple enough to find hospital cover that fits the bill.

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Extras cover for families

What does this type of insurance cover?

Medicare covers the cost of many services listed under the Medicare Benefits Schedule (MBS) and Pharmaceutical Benefits Scheme (PBS). But what about services not listed on these schemes and schedules? Extras cover helps pay for treatments that Medicare won’t cover.

Also known as general treatment or ancillary cover, extras policies can cover:

  • dental and orthodontic treatment;
  • optical services;
  • physiotherapy;
  • podiatry;
  • chiropractic treatment; and more!

The bills and expenses for these services can pile up over the years. This is why  finding extras cover that offers value for money in the long term should be a priority.

There are three general categories of extras cover:

  • Comprehensive cover: has a more extensive range of services and higher benefits for claiming. Services include cover toward general dental, major dental, endodontic, orthodontic, optical, non-PBS pharmaceuticals, physiotherapy, podiatry, psychology, naturopathy and acupuncture.
  • Medium cover: includes cover toward general dental, major dental, and endodontic, as well as five of the following – orthodontic, optical, non-PBS pharmaceuticals, physiotherapy, podiatry, psychology, and hearing aids.
  • Basic cover: includes minimum services that tend to vary from fund to fund.

Extras cover is highly versatile. You can purchase separately or combine it with hospital cover. If you decide to opt for combined cover, many insurers will let you mix and match different hospital policies and extras policies at your convenience.

Why extras cover is essential for families

Extras cover is suitable for your family’s everyday health needs, as opposed to the less frequent (but more serious) treatments. The best way to get the most value out of your extras cover is to pick a policy that suits your family’s lifestyle and your collective health needs. For example…

  • Is your family physically active? You may benefit from a policy that covers physiotherapy and podiatry in case any physical injuries crop up in the future.
  • Do your children need dental work? Is this dental work major, or do they just need a good scale and clean after all the lollies? Invest in a policy that covers dental treatment.
  • Does mum or dad need glasses? Also, are your kids likely to inherit your poor eyesight? A cheaper pair of glasses may not be the worst thing in the world, especially when your optical cover can finance frames and appointments.

It’s all about figuring out what your family needs from your policy. Talk to your partner about it and decide what would work best for your family. For example, you might choose to purchase medium level hospital cover as a safety precaution, but opt for comprehensive extras cover to suit your loved ones’ everyday health needs.

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Ambulance cover

Medicare does not cover the costs of emergency transport or ambulance services, which is why it’s important to arrange your own cover. Generally, you can purchase ambulance cover as part of your hospital cover or extras cover, or even as standalone cover.

However, depending on the state you live in, you may not even need ambulance cover, or you may be eligible for a discount. Check out our guide to ambulance cover for further information.

Important information for you to know

The Australian Government Private Health Insurance Rebate

If it’s the price of the premiums that’s making you a tad hesitant to invest in private health insurance, you’ll be happy to hear that the government can give you a helping hand. The private health insurance rebate is income tested and applies to hospital, extras, and ambulance policies.

Many Australians are eligible for the rebate, based on the following three conditions:

  • You must be eligible for Medicare;
  • You must have complying health insurance product (CHIP) that provides hospital cover, extras cover, or both;
  • You must have an income for Medicare levy surcharge purposes below Tier 3, as shown in the table below.

You can claim your private health insurance in one of two ways: as a premium reduction through your health fund, or as a tax offset when you lodge your annual tax return. If you want to use the former method, contact your insurer to discuss the matter, and if you prefer to do the latter, your insurer can provide you with the right paperwork for your tax return. More information can be found at the Australian Taxation Office website.

Medicare Levy Surcharge (MLS)

The Medicare Levy Surcharge (MLS) is another compelling reason to consider health insurance. It is levied on Australian residents that earn above a certain income and do not have private health cover. The MLS was devised by the government to prompt more people to invest in the private healthcare system, so as to ease the demand on Medicare.

As of April 2017, the surcharge is calculated at the rate of 1% – 1.5% of your income, in addition to the Medicare Levy of 2% which most Australian taxpayers pay.

Lifetime Health Cover (LHC) loading

When it comes to private health insurance, ‘sooner rather than later’ is always a good policy to adopt. That said, nothing proves that more than the Lifetime Health Cover (LHC) loading. This is a government initiative to encourage Australians to invest in health insurance earlier in life. If you take out hospital cover after 1 July following your 31st birthday, you’ll pay a 2% loading (on top of your premium) for every year you didn’t have cover.

For example, if you purchase hospital cover when you’re 40, you will be paying an extra 20% on top of your premium. And if you purchase it when you’re 50, you’ll be paying 40% more! The maximum loading you can pay is 70%. But after you have held private hospital cover for ten consecutive years, the LHC loading is removed.

The LHC loading applies only to hospital cover, not extras cover. In some cases, working out your loading can be tricky, so be sure to refer to our Lifetime Health Cover calculator.

‘Switch it up’

When our children are young, their bodies are constantly growing and developing. So it makes sense that their health needs will also change as well! Chances are the first health insurance policy you purchase won’t be suitable for your family forever.

With that in mind, make a point of consistently re-evaluating your private health cover as time goes on. This will ensure you’re getting the most out of your policy at any given time as well as help you keep track of what you should be regularly claiming on. For example, you might not be considering having more children at this point, but that may change a few years down the line.

Many people think that switching from one health insurance provider to another is complicated. It’s actually a straightforward process. The other great news is that there are no penalties or surcharges involved when you switch providers.  This means that:

  • Your Lifetime Health Cover status remains the same, with any age loading or absence of loading transferred to your new policy.
  • You will still be eligible for any rebates you’re receiving on your current cover; and best of all, waiting periods will be waived (provided you have observed the full waiting period for your previous policy and you don’t have any new or upgraded benefits).

Look out for your loved ones

When it comes to looking after your children’s health, having a helping hand can be a lifesaver. This is why private health insurance can be so beneficial for parents with young children. Having both hospital and extras cover means that you can rest assured knowing that your family’s health will always be in the best of hands.

Want to make a head start on shopping around for health insurance? Find something to suit your family’s lifestyle on our website, or speak to one of our health insurance experts on the phone if you have any questions.

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