Health insurance reviews

Health insurance reviews can be useful when comparing policies and insurers. They can tell you at a glance the features and benefits of a policy, and if they are unbiased, they can also point out any shortcomings.

This guide looks at what you need to know before you start reading reviews, what to look for when you do and what the most commonly used terms actually mean.

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What should you think about before comparing?

Before you can begin to compare policy reviews, it’s important to know what kind of health cover you need. This will depend on factors such as:

• Whether you are younger or older (young people tend to need less health services).
• Whether you are single or have a family (family health care needs will change as your children grow).
• Whether you are planning to have a family (pregnancy and assisted reproduction services are only covered in certain policies).
• Whether you have any pre-existing conditions that will require more treatment (e.g. major dental work or vision problems).

There are two main types of private health cover available, hospital cover and extras cover, and you will need to decide whether you require one or both and in what proportions. Both are available in three main levels of cover, basic, intermediate and comprehensive, and the level you opt for will depend on your budget and healthcare needs.

Once you have determined the type and level of cover you need, you can then begin comparing health insurance reviews to see which insurer and policy offers you the features you want at the most competitive price.

Are there any specific policy features to look for?

The policy features you value will depend on your individual healthcare needs, but a good combined hospital and extras policy will typically:

• Have fewer exclusions or restrictions.
• Have low or no out-of-pocket expenses.
• Have only minimum waiting periods.
• Cover more procedures and treatments.
• Include plenty of extra benefits, incentives and discounts.
• Have lower management expenses as a percentage of premiums.

In addition, the insurer providing the cover should have a good reputation, a good industry rating, a good claims payment record, high retention rates and few complaints. While a single review may not tell you all this, a quick browse of industry sites and forums will soon reveal whether the insurer is well regarded by consumers.

What traps should I watch out for when reading reviews?

Policy reviews should always be taken with a grain of salt. They provide a general insight into a policy’s features and they may downplay or fail to mention certain other features, depending on who the author is. Things to be aware of when reading a review include:

• The exclusions. Are they clearly outlined or at least easily accessible via a link to the product disclosure statement (PDS)?
• The restrictions. Do the restricted benefits, waiting periods and benefit limitation periods overly restrict the extent of cover?
• The extras benefits. Are there combined annual limits for extras or does the policy ideally pay individual limits as a percentage of the fee?
• The hospital excess. Is the excess payable once for all hospital admissions in a year or every time you are admitted, and is it in addition to a co-payment (daily fee)?
• The service providers. Are you required to use an insurer’s preferred provider network and is this practical in your circumstances?

It’s important to be aware of who has written the review, as a negative review may come from a disgruntled customer or competing provider and a glowing review may have come from the insurer themselves or from a writer paid to provide such health insurance reviews. To ensure you get the full picture, you should always read the PDS before committing to any policy.

How do I get the best value for money from my health insurance?

As well as finding the best policy for your needs by reading and comparing health insurance reviews, other ways to get value for money from your health insurance include:

• Paying your premium annually to avoid paying admin fees.
• Paying before the annual CPI increase (31 March) to lock in your current rate for another year.
• Paying by direct debit, which can earn you a discount.
• Increasing your excess to lower your premiums.
• Joining a restricted membership fund to enjoy lower premiums and higher benefits.
• Customising your policy so you only pay for treatments and services you may need.
• Looking for policies that offer incentives such as loyalty discounts and gap-free extras and no hospital excesses for kids.
• Avoiding the Medicare Levy Surcharge (MLS) and the Lifetime Health Cover (LHC) loading by taking out adequate hospital cover before you turn 31.
• Claiming the Private Health Insurance Rebate to reduce the cost of your health insurance.

Health insurance terminology explained

To better understand policy reviews, it’s important to know the health insurance jargon. The following is a summary of the most common terms:

• Excess. The amount you choose to pay towards your hospital treatment, which is payable at the time of admission. Typically, the higher the excess, the lower your premium will be.
• Benefit limitation period. An initial period when only limited benefits are payable on some types of treatments.
• Co-payment. An amount you agree to pay towards your daily hospital care in return for a lower premium.
• Exclusion. A treatment or service that is not covered by your policy and for which a benefit will not be paid.
• Gap. The difference between the service provider’s fee and the combined Medicare and health insurance benefit paid (an out-of-pocket expense).
• Lifetime Health Cover (LHC) loading. A government initiative to encourage you to take out hospital cover early in life. Every year from your 31st birthday that you don’t have cover, your premium cost will increase by 2% up to a maximum of 70%.
• Private Health Insurance Rebate. An income-tested government rebate for those with private health cover to assist them with the cost of premiums.
• Medicare Levy Surcharge (MLS). A means-tested, income-based tax of between 1% and 1.5% levied on those earning above a certain amount who don’t have private hospital cover.
• Pre-existing medical condition. A medical condition you are aware of prior to joining a health fund, which typically attracts a 12-month waiting period.
• Waiting period. The amount of time you must wait after taking out health insurance before you can receive a particular benefit. The maximum waiting period is usually 12 months.

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