Can I avoid the gap in cover?

If you go to hospital as a private patient, there can be unexpected gaps between the charges you incur and the benefits you get from Medicare and from your private health insurance. These gaps can be very substantial.

Gaps of this kind can arise from the policies of the hospital itself and of the medical practitioners that use that hospital.

If you ask, your insurer will provide you with details of hospitals where they have arrangements to avoid or restrict gap charges. Before you go to any particular hospital, it is a good idea to contact your insurer and double check the situation. You may choose to exercise your rights as a consumer to choose another hospital.

Of course, if you have a deductible or copayments on your health cover, you will have to pay those costs even if there is an agreement between your insurer and the hospital. However some hospitals will waive these too, so it is at least worth asking the question.

Doctors in Australia are free to charge whatever fees they believe are appropriate for their private services. However, many doctors also have arrangements with hospitals and with health insurance companies to limit the gaps between their fees and the amounts recoverable from Medicare and from private insurance.

Again, it is prudent to ask your doctor about charges, for the doctor’s
own services and also for those of any specialists (such as surgeons, anaesthetists and radiologists) that may be involved in your care.

You will not be charged more if you ask, and you may be charged less.

To compare health insurance and find the best and cheapest option for health cover you and your family you can go to www.ozecover.com.au. The service costs you nothing and its the only one that compares every health insurance company and every product in Australia. Your quote is personalised, based on your answers to some simple questions.

Health insurance premiums may go up in April

Every year the health insurance companies are required to update their product information and are then allowed to modify their pricing. This means that rates may go up in April. It is smart to lock in your health insurance now to avoid paying more.

To compare private health insurance and find the best and cheapest option for private health cover you and your family you can go to www.ozecover.com.au. The service costs you nothing and its the only one that compares every health insurance company and every product in Australia. Your quote is personalised, based on your answers to some simple questions.

How do I get value from private health cover?

It depends on whether you are likely to be a health insurance high claimer or a low claimer.

For Health cover high claimers - people who are frequent users of expensive private health insurance services such as prostheses, cosmetic surgery, orthodontics, IVF treatments - even the most expensive private health insurance products can be good value so long as the benefits exceed the premiums.

If you are likely to be a health insurance low claimer, private health insurance companies will consider you a very valuable customer and competition for your business is fierce. This means you can save real money by choosing your health cover wisely.

There are a number of methods that health insurance companies use to offer value to low claiming customers - the main ones are described below.

• Deductible (sometimes called a front-end deductible or excess) – you pay the first part of the total cost of a claim and your insurance cover starts after that. For example, under a hospital cover with a deductible of $500, you pay the first $500 of any claim and your insurer pays the balance. Hospital products with a deductible in excess of $500 per person or $1,000 per family do not qualify for avoidance of the 1% Medicare Levy Surcharge on high taxable incomes. Ozecover for example, does not suggest these non-qualifying hospital products.
• Co-payments (sometimes called moieties) - you make a contribution towards the cost of items which you claim, and your insurance pays the balance of the cost. For example, under a hospital cover with a co payment, you may pay $50 a day towards your accommodation in hospital or, with general cover, you may pay 30% of the cost of dental procedures, and your insurance pays the balance. Unlike deductibles, co payments may be used without restriction on hospital products that qualify for avoidance of the extra 1% Medicare levy. However, Ozecover again does not suggest products where co payments for hospital accommodation are more than $100 a day.
• Exclusions - these exclude cover for specified treatments. Common exclusions offered are for items related to childbirth, for cosmetic surgery and for expensive orthopedic procedures such as hip and knee replacements. Accepting exclusions can be a useful way of reducing premiums for people who, bec
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  ause of their circumstances or age, are most unlikely to want the excluded health insurance services.
• Benefit limits - restrict the maximum benefits an insurer will pay for particular services or in total. There are such limits on most private health insurance products to deter customers with frequent or sizable claims and to help keep health insurance premiums down for low claimers.

It is clearly important to do your research before deciding on your Private health insurance cover. Ozecover provides the only no-charge service in Australia, that allows you to do a comparison of every health insurance company and every product. Get your private health insurance quote now.

LOCK IN YOUR PRIVATE HEALTH INSURANCE

Peter Carroll, health fund actuary and director of consumer website Ozecover, advises consumers to lock in their current health fund premiums before health insurers increase their rates in April. Ozecover suggests consumers pay yearly if possible. This can reduce premiums by up to 10 per cent.

Be sure to compare private health insurance products to make sure you have the right one for you and your family.

How do I choose private health cover?

There are thousands of products on the market, and sorting through them is a difficult task even for experts.

To get good value for money, the product you select is more important than the particular insurer you choose. The primary decision for you to make is about hospital cover.

Once you have decided what to do about your hospital cover, you can think about whether it is worthwhile for you to pay more to get the extra benefits of general cover too. It does not make sense to spend more on extra premiums than you do on the health services they cover, many of which are routine day-to-day costs. If you think you might also benefit from adding general cover to your hospital cover, we suggest you discuss this directly with the Fund you choose.

You really need help to compare private health insurance products, otherwise you will spend many hours trying to sort it out yourself. The Quick Quote facility on Ozecover is designed to help you sort through all the different products, based on the information you tell us about yourself and your family. In most circumstances, the Quick Quote will suggest to you a list of hospital insurance covers from ten different insurers sorted in order of price. We suggest you make your primary decision about the hospital cover you want and, if you decide to buy, you may be able to apply directly through this site, because some have direct electronic linking to Ozecover.

What Does Private Health Insurance Cost?

Private health insurance is not cheap, and full cover for a family would cost as much as $3,000 to $4,000 a year. However, there are a number of ways of reducing these costs.

Firstly, the Commonwealth Government provides a rebate as a proportion of the total premiums paid for appropriate private health insurance. The proportion is 30% if the oldest person covered is less than 65 years of age, 35% if they are between 65 and 70 years of age, and 40% if they are over 70 years of age. This rebate is available even if you do not pay income tax. Your health insurer will claim the rebate on your behalf, and will bill you just the net amount. Your insurer will also adjust the rebate (thereby reducing your net premium) as you pass the age thresholds for the higher rebates.

Secondly, if you have a taxable income above a threshold amount - $70,000 a year for individuals and $140,000 a year for families - you must pay a 1% Medicare Levy Surcharge. However you can avoid this tax with suitable private hospital cover and, if you do so, the reduction in your tax is worth at least $700 a year for individuals and at least $1,400 a year for families.

These two Government incentives are added together. For example, if you are a single person under 65 years of age earning a taxable income of $110,000 a year, a premium of $2,000 a year for private health insurance will attract a rebate of $600 (ie 30% of the premium) and, if it includes suitable hospital cover, will eliminate your Medicare Levy Surcharge of $1,100 (ie 1% of $110,000), leaving a net cost to you of $300 a year.

Thirdly, if you are basically a healthy person and rarely go to hospital, then you can avoid cover which is too expensive for your needs and which you are unlikely to use, and you can reduce your premiums with deductibles, copayments and exclusions.

To compare private health insurance and find the best and cheapest option for you and your family you can go to www.ozecover.com.au. The service costs you nothing and its the only one that compares every health insurer and every product in Australia based on your answers to some simple questions.

What cover is available?

There are two basic kinds of private health insurance available in the market - hospital cover and general (sometimes called ancillary or extras) cover. Hospital cover provide benefits when you go to hospital as a private patient. (see Government incentives)

If you wish, you can go to any public hospital (that is a hospital operated by the government) as a Medicare patient and be treated without charge by a doctor appointed by the hospital. As a Medicare patient, you will usually be asked to wait your turn with other Medicare patients unless your treatment is considered to be an emergency.

Instead, you can choose to go to any hospital (government or otherwise) as a private patient. Then, you have the right to choose the doctors who treat you, and you can often avoid going on a waiting list.

Private patients must pay the hospital and the doctors who treat them and only some of these charges are covered by Medicare. Private hospital cover is designed to help you with the extra costs you incur as a private patient in hospital and after discharge from hospital.

There are different hospital covers available in the market – some designed for people who expect to incur frequent or large private hospital expenses and who want generous benefits, and others designed for people who are rarely in hospital or who are willing to pay some private hospital costs directly themselves.

General (ancillary or extras) cover provides benefits for health services you get from dentists, opticians, chiropractors and physiotherapists. Many of these services are not covered by Medicare, so private coverage is the only insurance option.

The services of doctors - GPs and specialists - are covered by Medicare. Private health insurance is available for these only to cover "gaps" between the Medicare benefits and doctors' prices when the doctors' services are provided in a hospital, but not otherwise.

The variety and levels of covers offered in the market are very broad. You can purchase hospital and general cover in combinations or, for most products, on a stand alone basis too. You can buy hospital cover from one insurer and general cover from a different one, if that suits you.

There are websites that allow you to compare various funds and products so you can select the appropriate one for you and your family. Ozecover is a comprehensive one that provides a free service and importantly includes all insurers and every product in the comparison. Click here to compare private health insurance and make sure you are getting the right coverage.