Essential Points to Consider When Choosing Health Insurance

You're likely thinking to yourself, why would someone want to consider private health insurance when Australia provides public insurance to its own residents? Although public insurance has many perks, private insurance has a more extensive range of options and services.

For example, private insurance allows you to pick your own doctors and to be treated in a private hospital. You'll be further up in the queue for elective surgeries and you can have peace of mind knowing you have access to the best quality care in Australia.

Government Rebates Help Out.

One advantage of private health insurance is that the government gives you specific benefits for having it. As of 1999, the government rebates 30% of your private health insurance cost, making health insurance affordable and manageable for everyone.

And if you're older and carry private health insurance, you save even more. Australian seniors 65-69 years of age qualify for a rebate of 35%, while seniors 70 and older qualify for a 40% rebate.

So even if you're getting on in age and need more health insurance benefits you may still be able to afford private insurance. You can even have the rebate assigned directly to your premium rate so the discount is effective right away.

But I'm under 30.

You're young and fit, but you're never too young to take out private health insurance. In fact, according to the Australian Health Insurance Association, 1 out of every 6 people ages 20-30 years with private health insurance and hospital cover make a trip to the hospital each year.

Of course, as you advance in years the chances of requiring hospitalisation increase dramatically, but it's quite obvious that even the younger generation of Australians need private health insurance.

Age and Lifetime Cover.

The other thing to consider is the cost of hospital cover if you don't take out a health insurance policy early in life. The Australian government initiated the Lifetime Cover program in 2000. This program encourages people to take out hospital cover earlier in life to help relieve the state hospital system by rewarding those who apply early and penalizing those who wait.

How are residents rewarded?

Those who take out hospital cover earlier are exempt from a 2% loading fee per year over age 30 for their entire life. For example, a person of 40 years of age taking out hospital cover for the first time in their life will pay 20% more than someone of the same age that has taken out hospital cover since they turned 30. This means signing up early gives you peace of mind and a savings that lasts your entire life.

What's MLS and does it affect me?

MLS, or the Medicare Levy Surcharge, affects you if you or your spouse make a high income and don't carry private health insurance. A tax of 1% is levied on single people with an income of $50,000 or more, and families with an income of $100,000 or greater if they don't carry private health insurance. So a single person making $50,000 is subject to a $500 tax for not carrying private health insurance.

What to Consider for Cover.

Health insurance policies can be confusing on a good day, so how do you go about choosing what kind of cover you'll need when you can't see into the future? Hospital cover is an important insurance to consider, because one in five people between the ages of 30 and 40 with hospital cover will go to the hospital each year. To get the best coverage you'll want to consider what state of health you're in and what your family will need.

Is exclusionary cover right for me?

Hospital cover is an important and valuable part of your health insurance coverage. However if there are specific services or care aspects which aren't essential for you at this time you can check if they're listed as exclusionary cover.

For example, if you're a woman who is done bearing children or is young and single, then a non-obstetric hospital cover would be a wise choice. You will receive all the advantages of private hospital care without any additional expense for pregnancy and other birth-related services.

However, if you're at a point in your life where you might need more hospital coverage you should be careful of what services you exclude. More coverage is better than not having enough in the event of an emergency.

What about excess?

Excess is an important thing to take into consideration when taking out a health insurance policy because the amount of excess you pay directly impacts your wallet. Excess is the amount you have to pay out of pocket before your insurance kicks in.

For example, if your excess is $400, you'll be expected to pay that amount before the insurance takes over payments. Some policies have an excess balance which is paid by you every year while others have an excess balance which is paid out before any sort of procedure or hospital visitation. You'll want to consider how much of an excess you have to pay when taking out your policy so you can plan ahead.

Managing 'the gap'.

You're probably wondering what the gap is in relation to health insurance, and why you have to manage it in the first place. The gap is the amount that is left over after the insurance company pays the doctor or hospital bill. You'll be expected to pay for the gap balance, so it's important to know how much coverage you're receiving so you can plan ahead or choose a different policy cover.

Waiting and waiting.

Waiting periods are ordinary when switching to any form of new health insurance, and they're definitely something to really think about if you have a pre-existing condition. A pre-existing condition is an illness or condition you had before buying into health cover, such as a chronic illness or even pregnancy.

So when changing policies or buying into a new one it's important to know the waiting period before you make plans for a baby. It's important to note that if you become ill or have an accident the waiting period doesn't apply. It's only for pre-determined conditions.

In Conclusion.

Health insurance can be confusing and expensive, but having it will give you the peace of mind you need to live comfortably as well as take the burden off the public system. By knowing what government benefits are out there and what to look for in a policy you're doing your part to keep you and your family healthy and prepared for anything in this hectic world.