Are you a couple in the market for health insurance? Enjoy convenience and savings with a joint plan.
Getting a joint health insurance policy may be a quick and easy way to minimise the amount of paperwork you and your partner have to do each year, but are there any other benefits to couples health insurance?
What are the advantages of couples health cover? What should you look for in a policy? Do same-sex couples receive the same benefits?
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Rather than taking out two individual policies, couples insurance is one policy that covers both you and your partner. When looking at taking out couples health insurance, there are two main areas of cover:
- Hospital cover. This covers hospital accommodation costs, doctors’ fees, theatre and medical expenses.
- Extras cover. This covers costs for services such as optical, dental and physiotherapy.
If you are a young couple just starting out, you may not consider comprehensive hospital cover to be a high priority. If you are young and healthy, not planning to have children any time soon and don’t play contact sports or indulge in high risk pastimes, then you may decide to take out basic hospital cover on a "just in case" basis.
Extras cover, on the other hand, may be more useful to you at this stage of life and you can shop for this online and tailor a policy that covers the extras each of you uses regularly. As you grow older and your priorities change, you will probably want to upgrade your hospital cover, but for now, you might get better value out of a combination of basic hospital and selected extras cover.
As well as providing a safety-net should you ever need to go to hospital, there are several good reasons to have health insurance for couples with a hospital cover component.
- Avoid the Lifetime Health Cover loading. The Lifetime Health Cover loading is a 2% loading on the cost of your health insurance for every year over the age of 31 that you don’t have adequate cover. The sooner you take out health insurance, the less the surcharge will be. As a couple, your individual loadings are taken into account, so if one has a loading and the other doesn’t, your average age loading will be theirs plus yours divided by two.
- Avoid the Medicare Levy Surcharge. Another reason to have health insurance is to avoid the government’s Medicare Levy Surcharge. This is a surcharge of between 1% and 1.5% if your combined income is more than $180,000 a year. By taking out even basic hospital cover, you will avoid this surcharge, which can be expensive come tax time.
- Cut your paperwork in half. A third reason to have couples cover is because it will literally halve your paperwork. You will only have one premium to pay, one policy to maintain and one form to fill out in the event of a claim.
The short answer to this question is the sooner the better. If you take out hospital cover before both your 31st birthdays, you will lock in the cheapest rate for the rest of your lives and not have to pay a surcharge on your health insurance as you get older.
If you are a young couple planning to start a family in the next few years, getting health insurance sooner rather than later would also be a good idea. That’s because there is a 12-month waiting period on pregnancy cover, so if you take out your insurance early, there’s a good chance you will have already served the waiting period when you do decide to have children.
As mentioned previously, the Medicare Levy Surcharge is an additional tax of between 1% and 1.5% for couples with a combined income of more than $180,000 who do not have adequate private health insurance. By adequate, we mean hospital cover, as taking our extras cover will not help you avoid the surcharge.
The rebate and Medicare Ley Surcharge levels applicable from 1 April 2016 to 31 March 2017 are:
What is the rebate?
< Age 65
< Age 65
What is the Medicare Levy Surcharge (MLS)
It’s important to compare insurance policies to ensure you are getting value for money. There are more than 30 health funds in Australia offering couples health insurance and each policy is different, so comparing benefits and exclusions will help you narrow down the field.
Online comparison sites are a great way to compare health insurance, as they bring many policies together on one site, saving you time and money. Things to look for include:
- The benefit limits on each area of cover and whether there are "gaps" between what is paid by Medicare and what the insurer will pay
- The credentials of the insurer including their ability to pay and their customer satisfaction levels (social media and health insurance chat forums can give you an idea of their general track record)
- The waiting periods, as these can differ with insurers
- The extra benefits and discounts being offered
- The overall cost of the policy (but this should not be the first or only priority).
Thanks to the Same-Sex Relationships (Equal Treatment in Commonwealth Laws - General Law Reform) Act 2008, same-sex couples are no longer discriminated against in Australia under law and they and their dependants receive the same entitlements as de facto and married opposite-sex couples.
The Health Insurance Act 1973 has also been amended to recognise same-sex relationships and allow same-sex couples and their dependants to register as a family for Medicare Safety Net purposes. Private health insurers also treat same-sex couples the same as heterosexual couples and offer them identical health insurance cover, recognising that they are living ordinary lives and have the same relationship-based responsibilities as anyone else.
Paying less for your health insurance is important for couples, particularly if you are saving for your first home or planning to start a family. While taking out a couples health insurance policy generally won't be any cheaper than getting two seperate policies, there are other ways you can find savings. The following are some simple ways to help reduce the cost of your premiums:
- Shop around. This is true for all forms of insurance. Comparing a number of policies can help you find value.
- Mix and match. Choosing only those benefits that you are likely to need or use regularly is a good way to save on your insurance.
- Choose a higher excess. The higher the excess, the lower your premium, but make sure you can afford it.
- Pay in advance. Premiums go up by around 5% a year, so paying a year's premium in advance will lock in the previous year's rate for another 12 months.
- Use approved healthcare providers. Those who have an agreement with your health insurance company often have special no-gap fees.
- Join a restricted membership fund. If you are eligible, premiums are usually lower and benefits are higher.
- Review every 12 months. Things change, so review your policy every year and switch if you find a better deal.
If your current health insurance policy is not meeting your needs, if you’ve found a better deal elsewhere, or if your own circumstances have changed, then switching insurers makes good sense. You won’t be penalised for switching either. As long as your current policy is up-to-date, your existing benefits will be transferred to your new provider including:
- Your waiting period exemption. If you have already served a waiting period, you will not have to serve another one.
- Your Lifetime Health Cover status. Whatever age loading you had with your current provider, this will remain the same with your new provider.
- Your government rebate. As long as you aren’t changing to another level of cover when you switch, you will continue to receive the same government rebate.
And the process of switching is a lot simpler than many people realise. Once you find the policy you want to switch to, just notify your current insurer, who will then send a Transfer Certificate to you or the new insurer. This document confirms your existing level of cover and waiting period and age loading status.