Do You Need Private Health Insurance?

About 30% of Australians have private health insurance. The Federal Government’s 30% private health rebate did temporarily put a halt to the chronic decline in membership which had been occurring for at least a decade. The problem is, as membership declines, health insurers find it necessary to put up premiums nearly every year to pay for claims. It remains to see if the rebate will prevent further decline in membership. If it does not, this could mean that the private health industry may not survive, which could have grave consequences for many low and middle-income families.

You will need to think about if you need private hospital insurance, if everyone is fit and healthy. You may well decide that paying for the occasional operation makes more financial sense than paying an expensive private hospital premium. Membership entitles you to reimbursement for the cost of a room in a private or public hospital, the charges for the operating theatre, and sometimes the cost of medicines not available through the Pharmaceutical Benefits Scheme (PBS).

You can also choose your doctor, and you also may be able to choose the hospital if it is appropriately equipped and your doctor is accredited there. Health funds often have contracts with hospitals, which can limit out-of-pocket hospital costs. Private health insurance means you can avoid a long wait for elective surgery.

When choosing your health insurance policy, you should go to a branch and get them to explain everything thoroughly to you, and not be pressured into signing on the spot. Take the policy home and read it carefully. Try different insurers and compare their products. Families are usually better with a family policy. Be careful to notice any exclusions and excesses payable on claims. Also find out what the gap payments are between what the doctor and the hospital charges, and the rebate the insurer pays. This gap can be substantial.

What everyone should consider is extras cover, especially for dental services. Anybody can need a root canal and crown which can cost up to $2000.  Also you need to be covered for physiotherapy. Anyone can be seriously injured, and require extensive and prolonged physiotherapy. There are some waiting periods for various services – ask your insurer for details. Take note also of annual limits which may grow the longer you are a member, and the rebate which may leave a large gap that you will have to pay. One good thing is that you can often have the private insurance payment paid at the surgery, so you do not have to come up with the total cost up-front, and do not have to stand in the queue at the insurer’s branch.

If you have a complaint with your insurer, take it up with them. If the issue is not resolved to your satisfaction you can contact the Private Health Insurance Ombudsman, whose number is in the White Pages directory.

Summary

• Consider your financial circumstances and whether you need private hospital insurance.
• Think very carefully about extras cover.
• Compare the policies of differences insurers, and take them home to read.
• Take note of gap payments, excess payments, waiting periods, annual limits and the levels of rebates.
• Try to pick a policy that does not include services you do not need.
• If you cannot resolve a dispute with your insurer to your satisfaction, contact the Private Health Insurance Ombudsman.
  

Article correct at its author date: Jan 2007. Copyright Virtual Office Space, Any unauthorised reproduction of this article will be prosecuted to the full extent of the law. Credit Cards Australia.

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