There can be great diversity in the cost of a health insurance plan. With so many variables – coverage, location, age of consumer, etc. – it can be a complex process assessing the risk and, as a result, the cost of a health insurance policy.
This is particularly true for people buying health insurance for the first time, and new insurance customers will want to know they are not paying more than they should. The Lifetime Health Cover policy makes this more of a concern for people over 30 years of age buying their first health insurance policy, as a 2 per cent premium applies for every year they delay.
It will not just be a concern for individuals; businesses offering a corporate health insurance plan to attract and reward the best talent to their workforce will want to keep costs down to achieve a comfortable return on investment.
So how do businesses and individuals keep their health insurance costs as low as possible? Excluding and restricting parts of your insurance plan can be one option, as outlined in the latest issue of Health Insurance Insider.
Limiting your health insurance policy
The recent publication, created by the Australian Government's Private Health Insurance Ombudsman (PHIO), highlights how and why insurance seekers may do this.
"There is demand from consumers for more affordable policies, particularly from younger people who may be taking out a policy for the first time and from people who are purchasing health insurance primarily for tax purposes. One way insurers can reduce the cost of a policy is by restricting or excluding certain treatments on the policy," the ombudsman explained.
"As a consumer, if you choose to take out a policy that has restrictions or exclusions on some services, you are taking on a higher level of risk in exchange for a lower premium."
Some of the extras consumers can exclude or restrict are:
- Cardiac and cardiac-related treatment (heart investigations and surgery);
- Joint replacement surgery;
- Cataract and eye lens procedures (eye surgery);
- Reproduction assisting services (infertility treatment);
- Pregnancy and birth-related non-emergency procedures;
- Rehabilitation and psychiatric treatments;
- Reconstructive and/or plastic surgery (skin grafts, breast reconstruction following cancer, etc).
Balancing the risk
However, as the ombudsman continued: "PHIO's advice to members is to take out a more comprehensive level of hospital cover and choose a higher excess or lower level of extras cover, rather than a restriction or exclusion on the policy."
If you believe excluding parts of your health insurance policy will benefit you, it is important to do so with care. For assistance in creating or restructuring a health insurance plan, your insurance broker will be able to help.
For this and other assistance, contact HICA on 1300 44 22 01.