Private health insurance helps millions of Australians find a better, more personalised level of medical care. For instance, as a private health insurance member, you have a choice of the medical facility from which you receive non-emergency treatment, you get to pick your physician and there are a range of extras to help you keep fighting fit, such as dental and eye care.
However, with premiums rising by around 6 per cent each year, it's leaving many people in a situation where they choose to keep their private health cover, but downgrade it, leaving them with fewer health care options.
According to the ABC, more than half a million Australians downgraded or dumped their policies entirely following an April 1 rise in premiums of an average 6.18 per cent.
It's obviously not ideal. The first thing on your health insurance checklist should be quality – after all, quality care is the sole reason for taking out private insurance in the first place. Balancing this with costs is no easy task.
However, in the grand scheme of things, it pays to focus on quality first. Whether you're renewing you health insurance or taking out cover for the first time, comparing health insurance is a great way to find a comfortable middle ground between cost and quality.
The client was left with various out-of-pocket expenses for things like scans, ultrasounds and echocardiograms
The risk of underinsurance
The case of Brisbane breast cancer victim Michelle Hennessey came to light recently in another report by the ABC. The 20-year private health insurance policyholder had what she thought was "top-level" health insurance, which included extras cover, for two decades. However, when diagnosed with cancer in 2011, she found herself with a $20,000 bill to pay thanks to the fine print in her policy.
"I went from never having any health issues, to all of a sudden having quite a lot. I had always assumed everything that Medicare didn't cover would be covered by my private health insurance and the reality was that it didn't cover a lot of things," Ms Hennessey explained in the news report.
The client was left with various out-of-pocket expenses for things like scans, ultrasounds and echocardiograms. It leaves a bitter taste in the mouth, so health insurance customers should be sure to focus on quality to avoid a similar situation – particularly in the coming months.
The health insurance market is competitive; let's use that to your advantage
Understanding your health insurance options
On April 1, health insurance premiums will rise again, putting more people at risk should they choose to downgrade their health insurance policies and limit their medical benefits. As always, it helps to plan ahead.
Before you take out a policy, be sure that you understand the fine print. If it doesn't match what you were told by your insurer, ask them about it. Grattan Institute's Heath Policy Analyst, Stephen Duckett, said to also pay particular attention to any exemptions.
"Over the last decade or so, the proportion of policies which have got exemptions with them, where you don't get covered for this or that, and the proportion of policies that have a deduction, that is, you have to pay the first $500, have gone up significantly," Mr Duckett said in the report by the ABC.
However, with potentially millions of words of small print contained in thousands of different products across 34 health insurers, Mr Duckett conceded that comparison is not always easy.
"Each one is slightly different from everyone else, so people find it hard to compare policies," he continued.
If you need a hand, HICA offers free and impartial assistance to individuals, couples and families. We can help you compare health insurance policies and find one that is the right fit for you, in terms of both budget and (of course) quality.
Before you downgrade your policy, give us a call on 1300 44 22 01 and let's first see what we can do. The health insurance market is competitive; let's use that to your advantage.