According to the 2016 Household Expenditure Survey by the Australian Bureau of Statistics, the average household pays 25.6% more per week for health care than they did in 2009. Given that such a significant percentage of your budget goes to your private health insurance, it might be tempting to cancel your cover. However, this is rarely a good idea.
Fortunately, there are several things that you can do to ensure that your health cover stays as affordable as possible. By following a few basic steps, you’ll generally be able to ensure that your family is adequately covered should they require medical care.
Key facts
- Applying for gap cover could help to cut out-of-pocket costs if you require treatment in a hospital.
- Make sure that the policy you have doesn’t include any benefits that you don’t need.
- Look for a fund that offers higher payouts for Extras so that you don’t need to pay more for your treatment.
- Switch to a Bronze Plus or Silver plan for affordable care with sufficient benefits.
- Compare policies from leading insurers to find the right option for your requirements.
Why cancelling your health cover may not be the best idea
The majority of people who have cancelled their policies in recent years claim that they have done so because they get little value back from their policies. However, this could not be any further from the truth. Although you may not need to use your policy daily, having cover in place means you won’t need to worry about footing the bill if you should be injured unexpectedly or fall ill.
If you’re thinking about cancelling your cover because you don’t see the value or can’t afford the premiums any longer, you may want to take an in-depth look at your policy first. By cutting back on benefits or switching to a more affordable plan, you may still be able to keep your health cover in place.
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How to keep your health coverage as affordable as possible
1. Look out for Gap Cover
Out-of-pocket expenses also called the ‘gap’, is the amount of money you typically need to pay for health services and treatments that exceed what Medicare and your health fund cover. Gap cover helps you to avoid these additional fees, which, in the long run, will help you reduce the amount of money you’re spending on health care every month.
2. Check your benefits
One of the main reasons why you may be paying more for your health coverage than you should be the type of policy you have and the benefits it provides. It’s generally a good idea to review your policy every year to ensure that it still suits your requirements. For instance, you may want to remove pregnancy benefits if you don’t plan on using them shortly.
3. Opt for higher payout Extras
Instead of cancelling your private health insurance, you may want to look for Extras policies that have a higher rebate for treatments and services you plan to use. This way, you’ll generally be able to save as you won’t be spending as much money on out-of-pocket costs.
4. Consider switching to a different plan
If you currently have a Gold Hospital policy, you may save on your health costs and avoid cancelling your policy by simply downgrading your plan. Most Silver and Bronze Plus policies cover a wide range of treatments and services that you may recover. However, they are often a lot more affordable than the Gold plans, which are available. Typically, you also won’t need to reserve any waiting periods if you switch to a lower level policy.
5. Compare leading insurers
Typically, it’s a good idea to review your health coverage regularly. By doing this, you’ll be able to make sure that you aren’t paying more for your cover than you can afford. This is also a great way to ensure that your health policy’s benefits suit your current requirements and life stage. To compare quotes, fill in the quote form below, or call us on 1300 795 560 to speak with a specialist.
Frequently asked questions and answers
What happens if you don’t have health insurance?
Australian taxpayers without private Hospital cover might face extra tax fees, such as the Medicare Levy Surcharge. This typically ranges from between 1% to 1.5% of your annual income. However, this is provided that you earn over $90 000 as an individual or $180 000 as a couple. You may also be required to pay the Lifetime Health Care Loading for every year you were without cover after you turned 31 should you apply for cover later on in your life.Why is there a penalty for not having health insurance?
The Medicare Levy Surcharge (MLS) and Lifetime Health Cover (LHC) loading fees are an incentive to take out Private Hospital cover. If more people are covered, it typically reduces the demand and strain on the public health system.What are the advantages of having private health insurance?
Private health insurance covers many medical services that are not included in the government’s insurance schemes. You can get free services or reduced fees for dental, optical, physiotherapy, ambulance transitions, prescription medications (non-PBS), etc. You may even find that premiums on certain policies are reduced after you turn 30.How much does private health care cost in Australia?
Premiums for private health insurance generally vary depending on several different factors. These include where you stay, the type of policy and the benefits you’re looking to include in your cover. It’s generally best to compare all of the options before purchasing a policy.
