Understanding the Impact of Rising Private Health Insurance Premiums
Private health insurance premiums in Australia have increased by an average of 4.4 per cent as of April, marking the largest rise in nearly a decade. This increase is adding to the financial pressures faced by many families who are already dealing with higher petrol prices, interest rates, and general inflation.
For some, this may mean considering changes to their health insurance coverage. Options such as dropping extras, mixing and matching hospital and extras cover between insurers, or even losing hospital cover to rely on the public system might be explored. However, it’s important to note that there are tax implications and long-term penalties if you decide to re-enter private health insurance after age 31.
In certain situations, downgrading to a more affordable policy could be an alternative, but it’s essential to understand that exclusions may apply. For those thinking about making a change, it’s crucial to ask the right questions to avoid potential pitfalls.
Key Questions to Ask About Your Private Health Insurance Policy
While most consumers are aware of checking for waiting periods and excesses, there are other complexities worth investigating:
Are Joint Replacements Covered?
Joint replacements, such as knee and hip replacements, are only legally required to be covered under expensive gold-level private health policies. However, some insurers offer them under silver plus policies. Patients have reported mistakenly believing that joint replacements on their policy only referred to elective procedures. As a result, they chose to downgrade from gold to save money, only to find out later that joint replacements were no longer covered.
Orthopaedic surgeons highlight that there can be a fine line between joint reconstruction (covered under cheaper policies) and joint replacements. You might not know what is needed until your care is well advanced.
Do I Have Accident Cover and What Does It Include?
Accident cover should not be confused with ambulance cover. Accident cover essentially upgrades you to gold-level policy benefits if you’re injured in an accident. However, it’s often offered in cheaper basic and bronze-level policies and not always included in silver policies. The definition of an accident can vary widely between policies, with some requiring surgery within 90 or 180 days or a year of the accident. Additionally, the accident must have occurred in Australia, and you need to seek care within three to seven days.
Do I Need Ambulance Cover in My State?
Ambulance cover varies significantly across Australia due to differing billing practices by state governments. In Queensland and Tasmania, it’s free for residents but not visitors, with limited reciprocal agreements between states. Other states have complex concession programs or roadside assistance-style schemes.
Some patients in states with free ambulance choose not to add it to their private health policy, but moving interstate can lead to forgetting to reinstate it. Many insurers only cover emergencies, not general patient transport, unless specified. Others only cover patients taken to hospital, not those treated at the scene.
If you receive an ambulance bill, always check before paying, as your insurer may cover it. Veteran, workplace, or third-party car insurance schemes might also help. Medicare might cover part of the cost as well.
Where Are Your Contracted Hospitals?
A no-gap agreement means a doctor and insurer agree not to charge a gap payment for procedures. Known-gap agreements allow co-payments up to $500, or $800 for obstetrics. Hospitals and insurers often have parallel agreements for no-gap or known-gap billing.
Check with your insurer where their contracted hospitals are for no-gap hospital fees, as the absence of one nearby could lead to out-of-pocket costs. Most insurers list their network hospitals online. Also, ask your specialist upfront if they will treat you as a no-gap or known-gap patient — this cannot be done after receiving a surprise bill.
If you know what procedures you may need, check with your insurer who their no-gap doctors are — they’re usually listed online. Always query hospital and doctors’ bills, as it’s illegal to charge gaps under a no-gap agreement.
What Is the Yearly Limit and Benefit for Extras?
Did you know some insurers only offer a lifetime cap for orthodontics? That’s right, it’s not a yearly cap, but a lifetime one of about $1,600. Some go higher. There are many technicalities in extra policies, so it’s essential to ask.
The first step is to check the yearly limit and the percentage paid. You might have a $300 yearly limit on dental but only get 40% of the bill back each time. Many insurers also offer no-gap dental clean and check-ups. The key is to ask ahead of time for a contracted dentist.
