How do you put a value good health? For many it is priceless. So how much are you prepared to pay to seek the best medical advice available?
Private health insurance is one of those lifestyle choices all us of face.
Do you go with the system and use the health safety net that the public health-care program provides to all Australians? Or seek the extra security and choice provided by private health insurance?
About a third of all adult Australians have private health insurance with the industry worth $5 billion dollars a year.
But that figure is likely to increase. From July 1 there have been changes introduced to the cost of private health care and many people have rushed in to take advantage of the savings.
The initiative of the Federal Government has been to try and increase the number of people covered by private insurance. The great fear is that as the population ages the public health system will not be able to cope with the increases in pressure an aging population brings.
Baby Boomers, those people born before 1964, make up the largest segment of Australia’s population and the demand for health services will increase considerably as they age.
The changes after July 1 have meant increases in health care contributions if you’re over 30. There is a 2 per cent impost per year until you are 65 years of age, with the maximum impost being based on a 65-year old.
Get in early and you retain the benefits of no impost.
For example both a 65-year old and a 75-year old will both have a 70 per cent impost. This only applies to hospital cover and there is no impost on ancillary cover. This provides an incentive for people below 30 to buy private health insurance and retain it for life.
The premium is based on the age you join. So if you join at 35 you have a 10 per cent loading which you retain for the length of your cover.
Ricki Smith, Manager Corporate Relations with HBF says there are a number of benefits that private health insurance brings.
This includes choice of doctor, choice of hospital and location and timeliness.
“You can go to hospital when you want to and avoid waiting,” she says.
“Some people think it is expensive and don’t realize there is so much choice. There are so many options it does become quite cheap.”
Additional options often include hospital room rates, dental, optical and physiotherapy benefits.
If you’re in a higher salary bracket, for example earning over $50,000 a year as a single or over $100,000 as a family, there is also a penalty if you don’t have private health insurance.
An additional 1 per cent higher Medicare levy to these income earners will cost over $1,000 a year. This is more than the cost of private health insurance.
Private health insurance buys peace of mind. But what if something goes wrong and you have a dispute with your insurer.
The Private Health Insurance Ombudsman handles complaints regarding health funds.
They receive 2,000 complaints a year covering about $80 million in transactions. This ranges claims ranging from $50 for a few physiotherapy visits to $50,000 for a multiple-heart valve replacement.
Norman Branson, Ombudsman for Private Health Insurance says their role is to act as the umpire.
He says about half the claims require the Ombudsman to take specific action.
“The biggest area is where somebody thinks they’re covered and they ultimately find out they’re not,” he said.
So if you are in the market for private health insurance here are 10 tips to help you find your way through the huge choice on offer.
10 Private Health Insurance Tips
1. Work out what you want cover for – basic, hospital, dental, optical etc.
2. Contact a range of funds. Meet with them personally to discuss your needs.
3. Don’t buy on price alone. Price is not the best determining factor. Look at the package and options available to suit your age and lifestyle.
4. Look for a product that suits your needs, For example you can save quite a lot of money if you’re prepared to share a hospital room.
5. Look for a fund that has a good reputation for making claims in a timely way.