Base Your Private Health Cover On What You Need
Newcastle Herald
Thursday November 27, 2008
MATCH your health insurance costs to your lifestyle risks.
Changes to the Medicare surcharge and tighter household budgets mean some people will be reviewing the ever-increasing cost of their private health insurance.Under the Medicare surcharge, people on higher incomes who don't take out private health insurance are taxed an extra 1 per cent.Legislation passed last month lifted the threshold from $50,000 to $70,000 for single people and from $100,000 to $140,000 for couples.By the Government's estimate, that means about 250,000 taxpayers will no longer have to pay the surcharge and some people are expected to drop out prompting warnings from the industry of higher premiums for those left behind.The exodus may or may not eventuate especially as there's no change to the rule that says people aged 30 or older have to pay an extra 2 per cent in premiums for every year they delay joining a fund but analysts say it's as good a time as any to consider whether you're getting value for money.The director of health insurance portal Ozecover, Peter Carroll, says: "As things get difficult, some people think about dropping health insurance."But that's a hard decision especially with Lifetime Health Cover, where they have built up the right to pay lower premiums and they will lose that."Analysts say consumers should be choosing health insurance that fits their risk profile ensuring they have the cover they need but keeping the price down by not paying for cover they don't need. They can also reduce the cost by ticking the box for higher excesses and co-payments.Carroll says the product you select is actually more important than the particular insurer you choose when it comes to getting value.The best-value product may not be the cheapest one.Consumer group Choice's health policy officer, Michael Johnston, says: "We'd certainly encourage people to shop around and look for the cheapest product, but it should be one that fits their requirements. The concern we have is that a lot of the cheaper products really don't give you much. They have a lot of exclusions."Cannex's health insurance analyst, Garfield Wright, says funds tempt people with cheap packages to get them in the door, then try to "up-sell" from there.People should consider from the outset what they need, he says. If you've completed your family, you won't want to pay for obstetrics cover. If you're young, you won't be worried about hip replacements. Wright says most "extras" claims fall into four categories: dental, chiropractic, physiotherapy and optical. So why pay for less common treatments like naturopathy?The Private Health Insurance Ombudsman has an independent comparison tool at privatehealth.gov.au. SMH
© 2008 Newcastle Herald