Should you keep your health insurance cover in 2019?
With premiums on the rise, it’s the one big question you should be asking yourself about private health insurance.
Following the recent announcement that health funds are set to hike up their premiums an average of 3.25% in 2019, more Australians are deciding whether the price of health insurance is actually worth the strain on their wallet.
Over the last four years, there has been a declining trend in consumer sentiment regarding health insurance. Customer satisfaction has dropped since 2014, and more health fund members believe they see no real value in keeping their private health insurance.
In Australia, 13.5 million people are covered by private health insurance. A recent Roy Morgan survey discovered that just over half those policy holders believe that their cover is really necessary. With a whopping 43.1% of members believing their cover is unnecessary, this begs the question: why stick around and keep your health insurance cover in 2019? There’s never been a better time to evaluate your health cover.
Currently, there is a considerable amount of confusion surrounding the simplification of private health care system and what these changes will mean for new and existing members over 2019. With these changes considered part of the largest reform across health insurance for two decades, there’s never been a better time to evaluate your health cover.
The system is being simplified, there are potential savings and increased benefits for existing fund members. So, before making a decision to take out new cover or close your old health insurance policy, here are a few things to consider:
Understanding the new system
Standardised ‘Gold’, ‘Silver’, ‘Bronze’ and ‘Basic’ product tiers will be introduced to hospital insurance cover. This will make it much easier for consumers to understand their benefits and know what is covered under their policies.
By standardising the product names and cover across funds, customers will now have the power to make more informed choices in relation to their cover thanks to easier comparison of similar cover, irrespective of the insurer.
Discounts for young people
From April 1, private health insurers can offer discounts of up to 10% to members under the age of 29, as an incentive for younger people to take out private health insurance. A single consumer could save up to $150 a year on a $1,500 policy while a young family on a $3,000 policy could save up to $300 a year. 
If you’re a young person below the age of 29, we’ve created the Medicare Levy Surcharge Calculator to help you choose the best cover.
If you’ve just turned 30 and you still don’t have health insurance, now is the best time to start looking.
Higher excess for lower premiums
These reforms also mean policyholders will be able to pay more in permitted excesses for private hospital cover to lower their premiums. Families could save up to $350 a year by increasing voluntary excess and singles could pocket savings of $200. 
Benefits for rural Australians
Customers living in remote or rural areas unable to access local treatment maybe able to access travel benefits and accommodation as part of their hospital cover.
Shorter wait times
Public system waiting lists for elective or non-emergency surgeries are infamously long. Unless you’re prepared to join the queue, sticking with your cover can help you avoid it. According to the Australia Institute of Health and Welfare (AIHW), private patients can benefit from less than half the waiting time than public patients (20 days instead of 42 days for elective surgery). 
Priority for emergency treatment
Public hospitals usually provide emergency treatment, so the system operates on a priority patient order. Patients in a critical condition are top priority, causing waiting periods to drag on for elective surgery and non-critical care. Being a private patient awards you the security of a locked-in surgery date, so you can be sure your operation will go ahead on time.
Save more on general services
If you’re considering ditching your health cover, out of pocket expenses could end up costing you more than a health insurance extras policy. With some general treatments and services falling outside hospital cover, and not covered by Medicare, private health insurance can give you rebates on these costs.
In the last financial quarter, the most common claims for extras were dental, optical, chiropractic and physiotherapy according to the Australian Prudential Regulation Authority (APRA). 
Extras cover provides benefits towards services like physiotherapy, optometry, dental care, hearing aids and home nursing, which can easily run up thousands of dollars in out-of-pocket expenses.
Reap the financial benefit of private health insurance
Granted, private health insurance is typically not a small expense, but you may be able to take advantage of tax breaks and rebates to alleviate the costs of your cover.
Most Australians can benefit from income-tested government rebates on private health insurance to help pay for their cover. This can be claimed through tax returns or as reduced premiums.
Fund members can avoid paying for Lifetime Health Cover Loading by taking out hospital cover before the 1st of July following their 31st birthday. This allows you to dodge the 2% loading on premiums that would accumulate yearly if cover was taken out after this time. If you planned on taking out hospital cover at the age of 40, you would pay 20% more on your premiums than a person who took their cover out before they turned 31. 
Combine your cover with Medicare
High-income earners can avoid paying an extra 1 to 1.5% (Medicare Levy Surcharge or MLS) tax on their income by holding a suitable level of hospital cover with a registered health fund. The levy amount depends on the income threshold you, or your family’s annual income falls under.
The final say?
Tackling the mountain of information surrounding private health insurance can be overwhelming. The process can be hard to navigate, and understanding the jargon can be confusing. That’s why Health Insurance Comparison is making this process simple. Comparing with us can save you time and money, because we do all the hard work and leave the decision-making up to you.
Before making a hasty decision, we recommend reviewing and researching your options to ensure you’re well-informed of costs, policy coverage and benefits. It pays to do your own research. Comparing only takes a few minutes, but could save you hundreds of dollars.
Using our free comparison tool only takes a few minutes. Thousands of Australians have already jumped on board. Why not join them?
Get Started Now:
Step 1: Select your state below.
Step 2: After answering a few questions, you will have the opportunity to compare quotes in your area and could be eligible for significant savings.