Health insurance

How do I choose?

From April 2007 the Federal Government will introduce new requirements on private health funds. In an effort to make it easier for consumers to compare all health insurance products on offer, certain information will be required to be published, including:

• premiums;
• waiting periods;
• exclusions;
• hospital and medical gaps; and
• excesses.

This information will be also published on a new Private Health Insurance Ombudsman website, funded by the Australian government.

Anything that makes choosing between the hundreds of different products available should be welcomed by both funds and consumers alike. However, there are many other details that need to be considered when taking out a health insurance policy.

1. Financial considerations - always ensure you stay within your budget. Many funds will allow customers to pay premiums in instalments so if an annual payment of hundreds or even thousands of dollars is a daunting prospect, ask your fund about paying by the month.
2. Type of cover – Hospital only? Premium hospital? Extras? Consider all your options and work out a policy to suit.
3. Who is covered? – Single, couple or family.
4. Hospital/fund agreements – many private health insurance funds have arrangements with particular hospitals. If no agreement exists you may find only limited cover is available. Personal out-of-pocket expenses could be substantial. This is a particularly important consideration for rural and remote health insurance policy holders, where hospital choice could be an issue.
5. Choice of doctor – many health insurance funds have contracts with specific medical practitioners. Treatment by a non-contracted doctor may result sizeable out-of-pocket expenses.
6. Registered funds – to claim the government’s 30% rebate, your chosen health insurance fund must be registered.
7. Changing your cover – are there any limitations or exclusions if you upgrade or downgrade your policy? Is there a waiting period before certain types of cover will come into effect?
8. Special offers – don’t get sucked in by fantastic sounding special deals offered by funds to get your business. Check it out very carefully and if it’s going to add to your premium and you don’t need it, don’t take it.

Comparing health insurance products

Most of the major health insurance funds, and many of the smaller ones, have an online presence. However, who has time to compare each one individually?

There are a number of resources available on the internet designed to assist consumers make the best possible health insurance choice.

• iSelect is a comprehensive online facility designed to analyse your insurance needs and provide you with a shortlist of the most suitable insurance. Application forms can be completed and submitted through the iSelect website making joining your chosen fund quick and easy. The iSelect service is free for consumers and funded by commissions from the funds themselves.

The Australian Health Insurance Guide offers information to assist consumers make an informed health insurance decision, including tips, explanations and advice. They also offer a facility where consumers can compare health insurance products.