More than 13 million Australians have some form of private health insurance. But many of us choose a policy without really understanding what we’re paying for.
We talked to four experts to find out how we could all be getting more from our cover.
The panel:
Guardian: What are the most common myths Australians believe about private health insurance?
Thinking the public system will look after them
Terry Barnes: The most common misconception is that people can rely on the public system to look after them - when they need it, where they need it and for what they need - and that’s not always the case. The private hospital sector is a great place to get things done. Taking out private health insurance actually relieves pressure on the public system. We are actually contributing to the health of other Australians by using that private choice.
Assuming younger people aren’t taking out health insurance
Matthew Koce: Younger people are in much greater numbers than the rest of the industry. More than 31,000 people aged under 40 have joined a Members Health fund since 2017. Our funds are attracting younger members; other funds are losing them.
People also might not realise there are funds that are restricted to a particular industry or profession, and that many people would qualify for them. If you’re with one of these funds, or another Members Health fund, you’ve got access to a national hospital network, just like any other insurer.
No matter how old or young you are, life can deliver some unpleasant surprises. For example, an injury on the sporting field may require elective surgery, and not having private health insurance could mean a very long and painful wait for treatment in a public hospital.
Not realising that pre-existing condition rules don’t refer to whether the consumer already knew about the condition
Ombudsman: Consumers may not realise that the pre-existing condition (PEC) rule relies on the signs and symptoms being present prior to joining an insurer, and not whether the consumer already knew about the condition or if the condition has already been diagnosed. Conditions deemed to be PEC are not covered in the first 12 months after joining or upgrading.
Thinking that if you’re really sick you will end up going to a public hospital
Michael Roff: There’s a common myth that if you’re really sick, you’ll end up going to a public hospital. That is not necessarily the case. About a third of all hospital beds in Australia are private, and private hospitals undertake about 40% of all episodes of care, and 60% of all surgery.
The research we’ve done shows people take out private hospital cover for peace of mind, and choice and access, but there’s not a good understanding of what people are and aren’t covered for. Understanding what is and is not in your product is very important, and you should continually monitor that as you go through different stages of life.
Guardian: How do consumers get it wrong when trying to get the most out of their health funds?
Not asking the right questions before choosing their fund
Ombudsman: Issues can arise when consumers find that they are not covered for a service or treatment that they had assumed was included in their cover, leaving them unable to access treatment or incurring large expenses to access the hospital treatment they need.
Customers can avoid this challenge and choose the right health fund for them by asking the right questions.
- If I go to hospital, will I have to pay an excess or make any co-payments?
- Are there any treatments I won’t get full hospital benefits for? Am I willing to take the risk of not being fully covered for those treatments?
- Does the insurer have agreements with the private hospitals I might need to attend in my area?
- How does the insurer’s gap cover scheme work?
- Will this policy exempt me from the Medicare levy surcharge? How much will this policy cost?
Buying on price point, not on need, and overreliance on comparison sites
Michael Roff: People are buying on a price point rather than what they might need. We did some research recently that showed more than 40% of people didn’t know whether their product had an exclusion.
Consumers also need to be wary of commercial comparison websites. The government has a comprehensive site that covers every product.
Make sure you pick a level of cover that has all the services you need, and then compare different funds on price and service models.
Matthew Koce: Comparison websites often receive commissions, which may influence who and what they recommend. They also do not always show every health fund in the market, nor every product available. That’s why it is best to shop around by going directly to health fund websites and picking up the phone for a chat.
Getting the right cover to fit with your lifestyle and health needs is really important. For families with kids, dental cover may be a key consideration. If you’re into sports, physio, chiro and remedial massage may be a priority. Having chat with the experts at a Members Health fund can prove to be a very wise investment of your time.
Looking at price and not at restrictions, exclusions and excesses
Matthew Koce: Consumers should carefully consider restrictions, exclusions, excesses and co-payments when making their selection. Just going off the overall premium price can lead to some nasty surprises. If you do take out a policy with restrictions and exclusions, Members Health funds are very good at making sure you will be informed about what is covered, and more importantly, what is not.
One of the things members get is really good advice. Before anyone is admitted to hospital, we always encourage them to ring their health fund and have a chat. Check out each of our member funds sites - links are found on our homepage - then pick up the phone and talk to the experts.
A set and forget mentality
Terry Barnes: A lot of people with private health insurance set and forget. With the government’s changes to rules for tiers you can sit down relatively easily and work out what’s in your policy and what’s not.
It’s up to you to keep checking and making sure your policy covers everything you and your family need. There are 35-odd health funds, so it’s understanding the differences between what they offer, the levels of cover that you are interested in, and having a real sense of what you and your family’s health needs are actually like to be over the next five, 10, 20 years.
Be prepared to buy. You may not need the top level of cover now, but you may need it in future - you can always change as your needs change.
To learn more about Members Health and the funds that put people before profits, go to membershealth.com.au.
