How to give your health fund a health check

More than 13 million Australians pay for some form of private health insurance, but is it the right insurance for them and are they adequately covered?

And what about the millions more who aren’t covered at all?

Whilst we all know that getting it wrong can have serious consequences, properly researching this area of insurance can be confusing.

So, here’s five tips for giving your personal finances a health check.

1. Health insurance – what’s the benefit?
   

   Private health cover in Australia has wide-ranging benefits for all kinds of people.

   Some of the main reasons why people get health cover are: having more control over their healthcare, avoiding long public hospital waiting lists, choice of doctor and fast, reliable access to high quality care.

   Australia’s tax system also has built-in financial penalties for those who don’t sign up, like the ‘Lifetime health cover loading’ and the Medicare levy for high income earners.

   What is not so often reported by the media is the significant returns many customers receive through benefits.

   For instance, Members Health Fund Alliance says its members receive on average 91% of their premiums back through paid benefits, which is much more than the big corporate for-profit insurers.

2. I have health insurance so what’s next?

   Research shows many people don’t know what kind of cover they have or what their policy covers them for.

   Some people are covered for more than what they need, while others are not insured for even the common treatments for their age group.

   Finding the right health cover for your needs is vital, but it is just as important to be confident that the health cover you have is giving you value for money.

   A common approach is to rely on commercial comparison websites, but the Australian Competition and Consumer Commission (ACCC) cautions customers against relying too heavily on commercial comparison websites, which can be heavily motivated by commissions and can be selective in which insurers and which policies they list.

   There are other ways to investigate your options.

   For instance, you should check whether you are eligible for an industry based health fund and look at Members Health Fund Alliance which represents 27 health funds that  are not-for-profit or part of a not for profit group that include both the industry based funds and those that anyone can join.

   Members Health funds cover over 3.7 million Australians and on average return more benefits back to members.

   Research shows they also have more loyal members who have a better customer experience.

   Yet many of these funds do not appear on the well-known commission driven comparison websites because it is simply not in the best interests of their members.

3. Have you considered an insurance health fund run for members, not-for-profit?
   

   A common misconception about health insurance is that all funds are largely the same.

   In fact, in Australia there are two distinct groups – there are health funds run to benefit investors and overseas owners like Medibank/AHM, nib, and Bupa, and then there funds run for people, not for profit, like those represented by Members Health Fund Alliance.

   Members Health funds are just like industry super funds, both put members ahead of profit. They don’t have to deliver dividends to shareholders and overseas investors so can give you much better value for money.

   In some instances saving you over a thousand dollars a year.

4. Is it safe to shift health funds?
   

   The short answer is yes, but if you’re wanting to get pregnant or have concerns about existing health problems, check with your preferred fund before you shift.

   All health funds must waive waiting periods for customers moving from an equivalent level of cover.

   If you are looking to upgrade to higher cover, waiting periods may apply for new services.

   So take the time to chat with the experts at your prospective health fund to fully explore what is covered and more importantly what is not covered, before choosing the level of insurance that is right for you.
   

5. How do I change insurance companies?
   

   Simply call your preferred fund to get the ball rolling or visit their website and look for their online transfer request form.

   The Members Health Fund Alliance also has a handy list of health funds run for people, not for profit and links to each website.