How to get the best value from your health insurance
Heath insurance is an important investment. So, it’s important to learn how to get the maximum value from your health fund, and get the most out of your hospital and extras cover.
Read our key tips from Edward Carruth, Senior Insurance Specialist at CUA Health Insurance.
Choose the right extras cover
Extras cover can help reduce the cost of some common services such as dental, optical and physio. Look at each extras policy to work out which one suits you best. Remember that how much money you can claim will depend on the level of cover.
“One of the biggest misconceptions around health insurance is that you're fully covered for any sort of expenses or claims,” Carruth says. “However, it's important to look at each policy because different levels of cover will cover you to different extents.”
“If you have an extras policy, you can claim either a set amount or a percentage of the cost of the treatment. For instance, if you choose the 75% extras package with CUA, you would get 75% of the cost of the service up to your annual limit. In the case of general dental, that would be up to $1,500. You can claim that 75% back on the spot, too.”
Most service providers have HICAPS (Health Industry Claims and Payments Service) machines that make it easy to swipe your card and claim the rebate on the spot. “Then you would simply pay the difference at the counter,” Carruth says. If there isn’t a HICAPS machine available, you can use the CUA Health Insurance app which lets you upload a photo of the receipt and claim it straight away.
Otherwise, you can lodge a claim through the CUA website, at a CUA branch, or by fax or mail. And with CUA Health Insurance you aren’t restricted to a list of preferred providers, allowing you to choose whichever provider you like, while receiving the same benefits.
Review your cover often
It’s well worth regularly reviewing your health cover as your circumstances change. “Have a look every one or two years, because you're not locked into any sort of contract and you're free to change your policy as it suits you,” Carruth says. However, be mindful that if you upgrade your cover or add other services, you will need to serve waiting periods for anything you’re adding.
Don’t worry about losing waiting periods
You might choose to stick with one policy and insurer because you’re worried that if you change, you’ll lose all the waiting periods you’ve already served. “All of the waiting periods transfer to the same or lower level of cover, so you won’t have to serve the waiting period again.” Carruth says. “Even if you just move to a completely different health fund, you don't have to start again from scratch.” “You’ll just need to serve any additional waiting period for upgrades to higher levels of cover.”
“For example, if you had a policy with one health fund that covered $300 worth of physio, and you moved to a policy with another health fund that had $550 physio, you could still access the $300 that you already served a waiting period for. You would just have to serve whatever waiting period that would apply for the extra $250 upgrade.”
Choose between hospital excess or premiums
Like any type of insurance, private health insurance has different levels of excess: nil, $250, $500, and under changes brought in recently, $750. The higher the excess – the amount you will need to pay if admitted to a private hospital – the lower the premium fees. With CUA, you’ll only be charged one excess per person per calendar year.
“That’s regardless of how many admissions that you go in for, and whether or not those admissions are related,” Carruth says. When you’re working out what level of excess to pay, consider how often you might need treatment in hospital.”
“For instance, if you have a diagnosed medical condition and you’re likely to go to hospital regularly, choose a lower excess,” Carruth says. “That way, you’ll pay a little bit more on your premiums each week or month, but you won’t have to come up with a lump sum payment if you are admitted to hospital. But if you don’t go to hospital very often, choose a higher excess and save your money on the premiums.”
Be informed about hospital costs
With hospital cover, you’ll usually have to pay the “gap” between the Medicare fee and the doctor’s fee. CUA’s Find a Doctor service lets you search for a doctor or specialist in a particular location with low out-of-pocket expenses.
“That way you’re more informed about what fees you’re likely to face. You can also confirm with your doctor whether they opt into the ‘CUA Access gap-cover scheme’,” Carruth says.
Get hospital cover before you’re 31
If you don’t have hospital cover by 1 July after you turn 31, you’ll start to accrue a Lifetime Health Cover (LHC) loading penalty. After then, you'll start accumulating a 2% lifetime health cover loading penalty each year to a maximum of 70% until you take out hospital cover. Once you do take out hospital cover, you hold onto that LHC penalty until you have had hospital cover for 10 continuous years.
“If you’re in your 20s and 30s and have never been in hospital, it can be hard to see the value of it.” Carruth says. “But if you take out health insurance in your 50s or 60s, you’ll have that 2% penalty for each year without insurance.”
“It does penalise you quite heavily later in life. You’ll suddenly have to pay 40% or 60% more on top of your hospital premium than someone else the same age who had cover the whole time. That's when you start to feel the hurt. Even the most basic hospital cover is enough to stop getting the LHC loading penalty,” Carruth says.
Since April 2019, the federal government has given health insurers the option of having an aged-based discount. CUA offers this on all eligible levels of hospital cover. If you're aged between 18 and 29, then you get up to a 10 percent discount on hospital insurance. You will hold that discount until you turn 40, when it starts to decrease by 2% each year.
Reduce tax penalties
For singles without health insurance who earn over $90,000, or couples earning over $180,000, the more you earn, the more tax you will pay through the Medicare Levy Surcharge. “For higher income earners earning more than $105,000, it is very easy to take out hospital cover that costs far less than what you'd be paying in tax,” Carruth says. “Even if you have no intention of using it, it at least saves you money.”
Keep your kids on your policy
CUA doesn’t charge excesses for children on family policies until they’re 23. “That’s higher than the industry average of 21, when children are often removed from family policies,” Carruth says. “If they're studying full time, they'll be covered until they turn 25 or whenever they stop studying.”
Don’t forget ambulance cover
“Remember that calling an ambulance costs money in most states. NSW, Victoria and the ACT in particular have high ambulance costs.” For instance, if you don't have ambulance cover in NSW, you'll be charged $392 for a call-out, plus another $3.54 per kilometre that you need to travel to hospital.
“All levels of CUA cover come with unlimited emergency ambulance automatically included in the policy, with a one-day waiting period,” Carruth says. “That’s good protection even if you take out a basic extras package just to cover yourself for ambulance.”
Edward Carruth is the Senior Insurance Specialist at CUA Health.