Health insurance. This is one of the most popular conversation amongst my (40-something) friends.
Many of my friends have private health insurance. We have our reasons for having it – we want choice of doctor / hospital, access to all the extra benefits etc.
But one thing we all agree on is that it’s getting more expensive. Forget a CPI increase – the premium increases are much greater then that.
It’s the time of year where funds inform their members of the increases in premiums. Most people will accept the increases and stick with the same provider. But if you’re interested in ways to make your cover cheaper, read on. It’s not hard to do and will save you money.
- Review what you currently have. What type of cover do you currently have. Hospital plus Extras? What is covered and what isn’t?
- What do you need? Using your current cover as a start, what features do you need? Many funds give you the option of removing things like obstetrics from the policy. If you’re not planning on having any more kids, then that’s a good option to remove. Also, have a good look at your Extras cover. Think about what you have used over the past couple of years and what you haven’t.
- Take out a higher excess. Many policies will reduce the premium if you take on a higher excess. Usually this is in the form of the contribution you make towards your hospital stay. Sometimes this is capped i.e. a co-payment for the first five days. If you’re in good health and not planning on going into hospital, this may be a good option.
- Shop around. Don’t assume that your current provider is the best. Shop around and see what else is out there. Don’t forget some of the more obscure funds may be available to you. I was looking at the Navy health fund a few weeks ago, and it’s available to more people than just current Navy personnel. Its premiums were also quite reasonable. There are other smaller funds, both here in Adelaide and interstate that are worth looking at.
- Understand the differences. I don’t think you’ll ever find two policies that are identical. So learn how to compare different policies to find the best one for you. When it comes to extras, have a good look at what you’re going to pay for premiums, compared to the benefits you’ll receive for the various treatment options. If you’re buying a new pair of glasses each year, it should be simple to work out how much you’d get back. In my experience, optical and dental are two of the most-used options, and also the ones where there can be the most variance around the benefits payable.
Don’t be afraid to ask questions. Speak to your fund other funds that you’re looking to join so you can be confident you’re making an informed decision.
This is a worthwhile exercise to do. It may only take a few hours to do, but can lead to some substantial savings.