Want the Cheapest Private Health Insurance?
While a lot of people may want the cheapest private health insurance, it may not be the best value for them. You’d be surprised how many Australians just continue with their same health cover, and don’t worry about getting the best value health insurance for them. It makes Billy Explores angrier than getting wrong directions to Timbuktoo. That’s why he’s made it his mission to help Aussies connect with leading providers and get the best deal on their health insurance.
Billy’s been busy tapping away at his keyboard to make this handy guide for all you Aussies out there who want the best value private health insurance (not necessarily the cheapest health insurance). Read on to find out more!
Understand Your Needs
Understanding your private health insurance needs is the first thing to think about. In a perfect world, nobody would get sick or need health cover. However, we’re not in a perfect world nor can we predict the future. We never know when we might get sick, but only you can make an informed decision about the type of health insurance you really need.
For example, if you’re an incredibly fit and healthy person, you probably don’t even need health cover, right? Wrong! In fact, if you play a lot of sports or put extra strain on your body, you may need some form of surgery at some stage in the future. Likewise, if you live a not-so-healthy lifestyle, you could be at risk of a whole range of health problems which you can’t foresee.
Nobody can predict when they’ll get sick or injured. That’s why you need to be happy you’ve got the best cover for your individual needs and at the best price. Hospital cover is a great idea for everybody who would prefer not to use the public health system if the unexpected happens, but you may be able to save some money by not choosing a whole range of extras you won’t use.
Choose the Right Extras
Many health funds offer different levels of extra cover, such as:
- Basic Extras
- Medium Extras
- Comprehensive Extras
The basic package will provide cover for a smaller range of services, compared to a comprehensive package with much more inclusions. Some of the services you may be covered for with an extras policy include:
- Medical equipment/appliances (hearing aids etc)
- Natural and Alternative therapies (naturopathy, acupuncture)
- Pharmaceuticals not covered by the Pharmaceutical Benefits Scheme
- Gym memberships
Please note if you’re looking to start or grow your family, it’s important you have tailored health insurance for pregnancy as well (under extras).
Essentially, an extras policy works on a reimbursement basis. Depending on the provider, you may be able to claim through your private health fund straight away or submit a claim for reimbursement later.
Most levels of cover will have an annual limit you can claim, so read very carefully about what your policy covers. If you feel you definitely won’t use it, consider ditching it to save money!
Beware – The Cheapest Private Health Insurance Might Not Always Be The Best For You
It’s tough finding the right balance between the cheapest private health insurance available and the best value private health insurance for your needs. A private health insurance policy may seem cheap and look great, but like most things the devil is in the detail.
One of the worst scenarios is to pay your health insurance premiums for years only to be disappointed when you actually need it. Some of the cheapest private health insurance deals may not cover certain types of surgeries or treatments, for example pregnancy in health insurance is an additional extra. It would be horrible to pay for years, only to suffer from an illness that isn’t covered. Not only will you be out of pocket for the treatment you need, you’ll feel like years of health insurance payments have been wasted.
So, when you’re choosing cover, remember that cheapest isn’t always best. Find yourself the best health insurance cover that has a good range of inclusions without costing an arm and a leg.
Pick a Manageable Excess
Excess is a lump sum amount payable should you have to claim on your hospital cover and is important element when doing a health insurance comparison. The way excess affects your monthly premium is:
- Lower excess payment means a higher monthly premium
- Higher excess payment means a lower monthly premium
Do you think you’ll need to go to hospital more than once every 5-10 years? If not, you’re better off choosing a higher excess which reduces your ongoing monthly costs. If you’re admitted to hospital it may be a little more difficult to manage money wise, but if your hospital visits aren’t too frequent, you’ll probably save the money in your monthly premiums.
Comparatively, if you’re at a life stage where you think you may be visiting hospital more often, you may prefer a lower excess so you don’t have to pay as much each visit. Your monthly premiums will be a little higher, however it won’t cost as much out of pocket if you’re admitted to hospital.
Help Save Expensive Future Costs with the Lifetime Health Cover
One of the best ways to get the best private health insurance at the best value for you is to take out cover before you turn 31#. In 2000, the Australian government introduced an initiative called Lifetime Health Cover (LHC) loading. It’s designed to encourage Australians to take out health cover at a younger age. Here’s how it works:
For each year after your 31st birthday that you don’t have cover, your private health insurance will be subject to a 2% loading increase of your annual premiums.
It’s important to remember if you already have hospital cover when you turn 31, you will always be entitled to the lowest rate you can find through a private health insurance provider (again, not necessarily the cheapest health insurance). You pay no extra loading on your premiums.
For example, if you waited until age 35 to take out health cover, that’s five years worth of loading you’d have to pay in additional to your annual premium. 2% each year for five years means your cover would cost 10% more. The loading rate stays with you for ten years, so getting in before age 31 can save you plenty of money per year and in the long term.
Reassess Your Cover Regularly
Making sure you’re only paying for the things you need is another good way to save money on your policy. As we get older, our private health insurance needs change, which is why ongoing health insurance comparison is so important. For example, you might need to include pregnancy in your health insurance.
You may not have needed extras when you were in your 20’s, but in your 30’s you may find greater benefit in having them. Check your policy regularly. There may be ways you can save money or get better value inclusions for you.
Do a Health Insurance Comparison
Probably the easiest way to find the cheapest private health insurance available through our partner’s panel of providers is to do a health insurance comparison with Billy Explores help! Billy has already done the hard work working with our partner iSelect, so all you need to do is pay him a visit and let him do a health insurance comparison of plans for you!