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How to Choose the Best Health Insurance Plan for You

If you’re considering buying health insurance for the first time or want to switch policies, then this simple guide will help you find a health insurance plan suited to your requirements.
Fact Checked

Updated: 24 May 2024

There is no one best health insurance plan. However, to help you choose a policy, you need to:

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What are the types of private health insurance available in Australia?

In Australia, private heath insurance consists of three main categories:

13 factors to consider before buying private health insurance

To help you choose the right health insurance plan for your requirements, you need to look attentively at:

Take note: The company has special agreements with an extensive list of hospitals across Australia. These arrangements provide members with accommodation, theatre, delivery suite, intensive/coronary care and a range of services offered by the hospital. You can find a GMHBA Participating hospital when visiting their website and choosing your location.

1. Your stage of life​

Choosing a health fund should largely depend on your age and family dynamic:

2. Your health

If you frequently or continuously suffer specific health problems or have a family history of developing hereditary diseases, you might want to consider investing in a top/gold Hospital and Extras policy that have higher benefit limits, a chronic health management program and provides coverage for non-PBS pharmaceuticals.

3. Provider networks

Review the list of hospitals, doctors and specialists tied to a policy and try to find one that has your preferred hospital and health care providers listed. Ask your doctor which insurer networks they belong to before choosing a health insurance plan.

4. Your budget

Price is an important consideration when choosing health insurance. There’s no point in purchasing the best policy if you won’t be able to afford it in the long-run.

Which is why you should pay close attention to the overall cost of your plan, including the premiums, out-of-pocket expenses and co-payments:

Higher excess and co-payments are designed to lower your health insurance premiums because you agree to make an out-of-pocket payment when admitted to hospital.

5. Gap cover arrangements

Gap Cover minimises or removes out-of-pocket expenses and is available from most private health funds. Essentially, it helps cover the gap between how much your policy will pay out and how much the doctor or specialist charges you when you go into hospital. However, not all doctors and specialists participate in these gap schemes, referred to as ‘no gap’ or ‘known gap’. Review which doctors on the insurer’s provider network have agreed to these gap cover schemes.

6. Government rebates

If you pay private health insurance premiums, you may be eligible for Australian Government rebates, which means you’ll receive a percentage of your private health insurance premiums back. These rebates are based on your income threshold, age and the number of dependent children you have.

7. Policy exclusions and restrictions

Always check the list of treatments and procedures covered under the policy’s Standard Information Statement (SIS) before making a final decision. However, such a list is rarely comprehensive, which is why it’s best to call the health fund directly to confirm what is and isn’t covered. Benefits and exclusions will vary from fund to fund.

8. Benefit limits

When comparing Extras policies review the limits attached to it:

9. Waiting periods

Consider the amount of time you’ll have to wait before you’re able to claim a specific benefit. Your waiting period will generally depend on the insurer and the type of treatment you need. Usually, waiting periods will apply when:

10. Pre-existing conditions

Generally, private health funds will require you to wait 12 to 24 months before claiming on any treatments or medications related to a condition you had before joining. This includes claiming for pregnancy-related benefits.

11. Travel frequency

Generally, private health funds will require you to wait 12 to 24 months before claiming on any treatments or medications related to a condition you had before joining. This includes claiming for pregnancy-related benefits.

12. Lifetime Health Cover Loading (LHC)

If you’re over the age of 30 and have not yet purchased hospital cover on the 1st of July following your 31st birthday, you’ll have to pay a 2% loading fee on top of the base rate of your policy when you do decide to buy health insurance. The additional 2% will be added each year, up to a maximum of 70%. Once you have a loading, it can only be removed once you’ve had cover in place for 10 consecutive years.

13. Medicare Levy Surcharge

You’ll pay an additional 1% to 1.5% tax if you do not have private hospital cover and your annual salary is higher than $90,000 a year when you’re single and over $180,000 as a couple or family (2018). 

Where can you buy health insurance?

Australia has a very long list of private health insurance providers for you to choose from. You can decide to buy straight from the insurer or use a comparative website to help you shop around to gather and compare quotes.

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Specialist

Megan has extensive experience writing about health and life insurance in Australia. Megan has a special interest in health and wellness. She relies on her background in counselling psychology to convey the latest findings in a manner that is most beneficial to ComparingExperts readers. In every article she writes, Megan aims to uphold the standards of the Private Health Insurance Intermediaries Association (PHIAA) which ComparingExpert is part of.

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