Reviewing Your Health Insurance

Research suggests that once people have set up their health insurance, they?re unlikely to change it. But with the changes in the health insurance rebate, a lot of people are considering their policies and whether they should downsize in order to save money. A good breakdown of the effect of the new regulations around health insurance is to be found here.

It?s not a bad thing, to be given a reminder to have a look at our health insurance. After all, we should be reviewing all our policies and what better time to do it than at the changeover of the financial year. Experts are concerned, however, that the desire to lower health insurance coverage will mean people settle on policies that are full of exclusions and end up financially out-of-pocket. Here are some health checks to make on your current (or considered) health insurance policy, drawn from an article on Sydney Morning Herald and the Federal Government private health insurance website.

Hospital Cover

It?s essential, when shopping or updating health insurance, to understand what is covered with the plan. It might be called hospital cover, but does it include all kinds of operations (a premium product) or just some basic ones, like getting your tonsils removed? It might not seem like a huge problem now if you?re not covered for obstetrics, but can you really say with certainty that you won?t be having a child anytime in the next couple of years?

Ambulance Rides

Another way people can get kicked in the teeth when it comes to health insurance is the cost of the ambulance ride. It isn?t necessarily covered in your policy, and can be painfully expensive if you aren?t covered. The worst case scenario is that an emergency occurs and you hesitate calling the ambulance because of the cost. It?s not something I?m willing to risk.

Other Essentials In Cover

The article in the Herald suggests that one of the major problems they?re seeing is that young, healthy people are buying basic level cover that doesn?t actually help them with any health concerns. No matter how fit you are, wisdom teeth removal, replacement surgery (especially if you play any kind of sport) and psychiatric care are crucial in your cover. And while you might think you?ve got years to prepare for a cancer or heart scare, if it?s in the family, experts suggest getting coverage.

Lifetime Health Cover

A new factor in the whole debate is the lifetime health cover initiative from the Government. Basically, for every person over 30, you are expected to have taken out health insurance. For every year after your 30th birthday that you remain uninsured, there will be a 2% loading on top of the actual cost every time you end up in hospital. And that?s a 2% loading for every year from your 31st onwards. So, if you haven?t taken out health insurance, end up in hospital and you?re 40, you?re looking at an extra 20% loading. In other words, ?optional? health insurance comes with a financial penalty if you don?t insure yourself.

Rebate

There is also the private health insurance rebate, to mitigate the cost of insurance. It?s a tiered system, based on household set-up and income. You can find a complete table at the Australian government?s private health insurance website, but should be looking at a rebate of 30% for singles earning below $84,000 or families earning below $168,000.

**Savings Guide Disclaimer - Please Read**

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