If you have health insurance, there is a good chance you’ve received a letter or notification about your health insurance premium costs going up from 1 April. For the lucky ones there might not be much of a price hike but for plenty of us there will be increases that could be as high as an extra 4 per cent or more, which for some of us already struggling with the cost of living may feel like the last straw.
There have been plenty of conversations, especially among older Australians about whether there is any point maintaining their private health insurance and questioning the value that it really provides, especially after years of what feels like increasing costs and decreasing value.
While we do have Medicare in Australia and private health insurance isn’t compulsory, here are a few things to consider before making any big decisions around cutting your private health insurance due to rising premiums.
Loyalty doesn’t pay: Yep, it’s a cliche but it still holds true. Recent research from Ipsos showed that one in five Australians hasn’t reviewed or switched their health insurance in five years or more. This is far too long. Why? For starters, every few years there’s a good chance your health needs might have changed – as we get older more things tend to go wrong and often this involves elective surgery to improve our quality of life. From hip and knee replacements to cataract surgery, these have increasingly long waiting times in the public system (in some cases close to two years now, depending on where you live). And while these issues may not be urgent in the sense they are going to put your life in immediate danger – two years of chronic pain or limitations are sure to affect your quality of life.
Reviewing your health insurance if you’ve been with the same insurer for some time can not only address your changing needs, there’s also a good chance there are new health policies on the market offering far better value than your old one too, even if you stayed with the same insurer. The best offers are usually saved for new customers and old policies can also age out by not keeping up with inflation, so what might have been good value 10 years ago is no longer the case.
Don’t go too high or low: As a rule of thumb ‘Basic’ health cover is going to provide very little value for money for older Australians, while ‘Gold’ policies will often be very expensive. And the difference in price between a Gold and Silver plus policy can be significant yet the kind of health issues it covers is very little. Cover from a Bronze plus to a Silver plus is likely to give most Aussies what they need medically.
Reviewing and switching CAN be easy: Health Insurance can be diabolically complicated and I have seen experts in the field, including myself, making mistakes trying to navigate policies and covers. It can be very difficult to compare policies and insurers and buying the product off the shelf can mean paying for a policy that doesn’t have much value in real terms. Recently, I’ve heard of a number of older Australians who purchased their own health insurance thinking they were covered for a knee replacement but instead were covered for a knee reconstruction. (While sounding similar these are two very different procedures.)
The familiar catch cry ‘do your homework and shop around’ is used frequently when it comes to health insurance, but if it really was that easy there wouldn’t be entire businesses based around helping people review and switch services like health insurance.
Rather than attempting to get across the fine detail of health insurance one of the best ways to see if you can save some money and get better value for your buck is to speak to a health insurance expert who can review what cover you have now and let you know if you can switch to another insurer to save money, get better value or in many cases both. The good news is that this process can literally involve just a phone call and 20 minutes, in which time you can be reviewed, walked through your options and if you are a candidate to be switched that can be done on the spot – no paperwork, no follow up.
While rising costs are putting a real pressure on many Australians, before pulling the plug entirely, it’s vital to have your health cover reviewed first as you might be surprised by just how much money you can save by switching to another provider, and just how easy it can be to switch. By putting this step in before ditching your health insurance entirely, there’s a good chance not only will your budget be in better shape but your peace of mind around your health will be too.
Kate Browne is the head of research at Compare Club.
When was the last time you compared your health insurance? Have you ever switched insurers before? Let us know in the comments section below.
Also read: Why are retirees taking out life insurance on their adult children?
