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New research shows that that over two-thirds of Australian health insurance policyholders are unsure what portion of their health insurance extras are not being used.
A national survey of more than 2,000 people showed that a potential $4.5 billion worth of health insurance extras are going unused at an average of about $550 per person.
If it feels like you keep paying health insurance premiums but you aren’t getting anything in return, then this might be why. The good news is that you can either start saving money or start using the benefits that you are entitled to.
Before renewing your extras cover, ask your fund for a claims statement and then compare the amount claimed on extras with the amount spent on premiums. If you’re spending a lot more than you’re claiming, you probably don’t have a health insurance policy that’s right for your needs.
12.2 million Australians are signed up for health insurance extras.
In 2016, private health insurance premiums increased by an average of 5.59%, while insurers pocketed $4.5 billion in unclaimed extras. How much of that money was yours?
The following is a list of common health insurance extras found on most policies. How many of these do you actually use?
*These treatments are largely covered by Medicare when required, and are freely available to Australian residents even without a health insurance extras policy.
If you’re like most Australians with health insurance extras, you are paying for all or most of these but rarely, if ever, using them.
Even if you do use some of these, and claim the maximum amount possible each year, there’s still a very good chance that it’s simply not worth it. This is because of the restrictions and limitations of extras cover.
A very basic extras-only policy typically costs hundreds of dollars per year in premiums, while more comprehensive ones may cost thousands. Either way, there are many restrictions on the benefits you can claim.
To figure out whether you’re actually getting gouged by your extras policy, you need to know exactly how it pays benefits and what the limitations and restrictions are. Read your insurance policy’s product disclosure statement (PDS) and look for the following:
The only way to get a truly effective health insurance extras policy with good claimable benefits, high limits and a low excess is by paying much higher premiums. This may not be worth it.
An extras policy with low premiums, however, will likely be hamstrung by poor claimable benefits, low limits and possibly a high excess.
The first way the start getting better value for money from your extras is to start using more of them.
Use up all your extras. Taking advantage of them where possible should improve your overall health and wellbeing. If you simply aren’t interested in them, then consider downsizing your policy to save money instead.
Everyone is able to take advantage of the following:
If you decide to start using up your extras, remember to be aware of the limits, excesses and claimable benefits. There will most likely still be some costs involved.
Not everyone is interested in these benefits, and the best option for some people might be to simply cancel or downsize their health insurance extras policy to start saving money right away.
Health insurance is a competitive market, so changing funds or policies is fairly easy and routine. If you aren’t getting value for money from your current health insurance extras policy, your options here are to switch funds , downgrade your policy or simply cancel it.
Every year that passes with unused health insurance extras and premiums that aren’t paying for anything is a year of wasted money. If you’re one of the two-thirds of Australians falling into this trap, then take control of it today and start saving.
Picture: Shutterstock
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