Australians already know that health coverage can provide security for individuals and families when a medical need arises. Many, however, don’t know how to find the best value when comparing health insurance policies.
Below are 10 tips everyone should read before purchasing private health coverage.
- Choose coverage that focuses on your specific health needs or potential health needs.
The first thing you should do before comparing your health plan options is to determine which policy features best meet your needs. A 30-year-old accountant, for example, will need very different coverage than a 55-year-old professional golfer or a 75-year-old retired veterinarian. By understanding the health needs that most often match people in your age group and activity level – your stage of life – you can save money by purchasing only the coverage you need and avoid unnecessary and irrelevant services. For example, a young family with two young children will not need coverage for joint replacement or cataract surgery. A 60-year-old teacher will not need services related to pregnancy and birth control.
Whether it’s top-notch comprehensive care you’re looking for or the cheapest option to exempt you from the medical fee surcharge while providing basic care coverage, always be sure to compare health insurance policies with only the services you make sense to you and your family.
- Consider options like Deductible or Co-pay to reduce your premium costs.
When you agree to pay a specific amount in case you are hospitalized, you sign up for a Deductible or Co-pay option that will reduce your health insurance premium.
If you choose the Deductible option, you agree to pay a specific, predetermined amount when you go to the hospital, no matter how long you stay. With a co-pay option, you agree to pay a daily amount up to a pre-agreed amount. For example, if Joanne has a $250 excess on her medical coverage policy and is admitted to the hospital, regardless of how long her stay is, she will pay $250 of the final bill. If Andrew has signed a $75×4 copayment with his provider, he will pay $75 per day for just the first four days of hospitalization.
For younger individuals who are healthy and fit with no reason to expect to get to the hospital any time soon, any of these options are great ways to reduce the monthly cost of your medical insurance premiums.
Keep in mind that different private insurers have their own rules when it comes to Deductibles and Co-payments, including how many payments you will need to make annually under either option. It is important to read the policy thoroughly and ask questions in advance to get a clear understanding of what you are paying and what you can expect in terms of coverage if you are hospitalized. Also, be sure to choose a deductible option greater than $500 if you are purchasing an individual policy, or $1,000 for family coverage, to be exempt from the Medicare fee surcharge.
- Pay your health insurance premium upfront before the cost increases.
Each year, insurers increase their premiums by approximately five percent around April 1, a practice approved by the Ministry of Health. By instituting these annual increases, your health insurance provider maintains the ability to meet its obligations to policyholders despite rising medical costs.
Most private medical policy providers allow policyholders to pay a year’s premium upfront, which locks them into the previous year’s rate for another 12 months – a great way to save money. To take advantage of the savings offered, most insurers require full payment to be made in the first quarter of the year, between January and March.
- Block low cost health insurance at an early age.
The most obvious advantage any Australian can have when it comes to saving money on their insurance premiums is to buy in advance at the cheapest rate available. And by early, we mean before age 31. Everyone who is eligible for Medicare will receive at least a 30% government discount off the price of their health care premium, no matter their age. However, by purchasing hospital coverage before July 1st after your 31st birthday, you can guarantee the lowest available premium rate.
After age 31, your health insurance rate is subject to a 2% increase in the penalty rate for each year after age 30 that you did not have health insurance. So if you wait to purchase private health coverage until age 35,