Sponsored Private health insurance and what you should know
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Private health insurance and what you should know

HBF explains hospital v extras cover, the gap, and shopping direct. Photo: Getty
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Private health insurance can be complicated, and without the right support it can sometimes be categorised into the ‘Too Hard Basket’ or ‘I’ll do it tomorrow’ and never get there.

But the folk at HBF say it doesn’t have to be that way.

The not-for-profit health fund that has recently taken the rest of Australia by storm has simplified its insurance offering, making it easier for members to choose the health cover that’s right for them, understand what they are covered for, and change their health cover option as their needs change.

1. Hospital v Extras cover
People often think of private health cover as a confusing subject . In actual fact, it’s made up of two key (and very helpful) components: Hospital cover and extras cover.

Hospital insurance helps cover the cost of essential medical bills when admitted to hospital for treatment, as well as giving members the freedom to choose their preferred hospital and doctor and eliminating public hospital wait times and government surcharges.

Private health insurance can be complicated, but HBF say it doesn’t have to be that way. Photo: Getty

Extras cover, on the other hand, helps with the cost of everyday healthcare services that Medicare doesn’t generally pay a benefit towards. These are things like your visit to the dentist, chiropractor or physio.

From that point on, it’s a mix-and-match situation. You can buy hospital cover on its own, or extras cover alone – or choose to combine.

Alternatively, some health funds also offer package products that are a set combination – HBF’s current proposition is to mix and match your cover to give you more flexibility and choice.

Everyone’s needs are different, so it’s important to understand the cover that’s right for you.

2. Gaps
We could call them by their full name – ‘out-of-pocket expenses’ – but who has the time for that?

Australians are celebrated worldwide for their ability to shorten, abbreviate or nickname anything with more than two syllables (See: ambo, servo and iso), and thus ‘the gap’ was born.

When it comes to your hospital treatment, costs are generally shared between you, your health fund, and Medicare.

The Medical Benefit Schedule (MBS), is a list of Medicare services funded by the government and the benefits payable on these services.

A gap occurs when the total cost of your treatment is more than the combined amount paid by Medicare and your health fund, leaving you to cover what’s left.

Hospital insurance helps cover the cost of essential medical bills when admitted to hospital for treatment. Photo: Getty

Gaps exist because specialists can choose to charge fees above the MBS and because some services that assist with your treatment aren’t covered by Medicare (e.g. diagnostic testing).

Rest assured you’re legally entitled to know how much your treatment will cost before undergoing a procedure or being admitted to hospital. So before you go ahead, speak to your doctor, specialist or practitioner, and contact your insurer for more guidance.

3. Shopping direct
If abbreviation is a true-blue Australian pastime, so too is shopping around – people naturally want to compare rates before buying health insurance, but it’s worth understanding how comparison sites work.

Some are based on ratings and reviews and will direct you to contact the insurer directly for a quote.

Others will provide quotes from affiliated health insurers – and it’s worth noting that you may only be shown a select few insurers, who pay that site a commission for selling their products.

“We were the first big insurer to come off broker sites, because the cost of broker commissions is nearly 30 per cent. The industry is shrinking in size and we (were) spending twice as much on commissions,” CEO John Van Der Wielen.

HBF prefers direct conversations with customers to pinpoint their right cover to best suit customer needs.

What’s more, having ended commission-based arrangements with brokers, they have been able to reduce overheads and offer more affordable premiums.

It’s all part of being a not-for-profit organisation that focuses on its members – not shareholders.

Interested? Let HBF help find a cover to suit your needs.