Thursday, May 26, 2011
Health insurance prices will again experience increases above 5.5% on average in 2011. In the past 10 years prices have almost doubled, but more than 90% of customers, about 10 million people, still do nothing about it.
‘While hefty increases in health insurance each year are as predictable as the sun rising each morning, there is no reason why long suffering customers can’t improve their cover and pay less’, says Andrew Davis from specialist health insurance advisory company ChooseWell.
It’s common for people to keep their health insurance for decades, but far less common for people take the time to review their cover. When they do, they are often surprised by the savings on offer.
‘Most of our customers actually save $300-$600 each year when we do a review of their cover. Some save more than $1000’, says Davis.
He also points out that people’s circumstances change, and that this should trigger a change in their insurance. For example, people have different medical needs in their 50’s than they did when they were 30, and as a result need to alter their health insurance to reflect their life situation.
‘The best cover at the best price can be very different for people who, at face value appear to have similar needs’ says Davis.
Customers shouldn’t have to change doctors or specialists to suit their insurer, but rather they should find an insurer that best meets their personal needs, something which is actively pointed out by Davis. For example, having a family doctor who is on a preferred provider list can mean over $500 in refunds every year. If your doctor isn’t on such a list then you’re better off with cover that pays a fixed % of the charge incurred.
Substantial savings can also be available to people with an excess on their hospital cover. Having an excess is a good financial decision if you’re not in hospital regularly, and it has no impact at all on how comprehensive your cover is. Some funds will even waive the excess for common same day procedures.
‘There are several reasons why premiums are increasing: Doctors and Hospitals look to increase their fees and profits; the population is aging; and medical technology advances; all mean insurers are trying to recover higher claims’ says Davis.
‘Prices typically increase by 5-8% and many households now find health insurance among their highest cost items and certainly the most expensive of all the insurances.’
How can ChooseWell help?
ChooseWell aims to take the guess work out of buying health insurance through taking the time to talk to people about their current and anticipated needs.
ChooseWell understands that people are naturally very reluctant to risk losing coverage and that it is very difficult for customers to compare health insurance products without expert assistance. Unlike banking, the government has had long-time arrangements in place that allow consumers to move between funds without any loss of entitlement. In reality, switching is easy, as it takes a few minutes and requires a single signature from the customer. Choosewell strives to ensure that you’ll be fully covered from day 1 if you switch to a comparable level of cover.
For further details call 1300 42 11 54 or 0438 400523 or email firstname.lastname@example.org.
Thursday, May 19, 2011
The Government is having a 3rd attempt at phasing out the 30% rebate for ‘high’ income earners. We’ll know in a couple of months whether this change will take place. Libs are Against, Greens are in favour, independents unknown. If it does occur, dropping insurance won’t be an attractive option as the tax penalties could be almost as much as the insurance premium. I’d recommend sitting tight until there is some more certainty.
We don’t need to wait to know that there are already penalties in the system to ‘punish’ those who don’t have health insurance. If you are a single person earning say $85,000 you’ll be hit with an extra $850 in tax this year if you don’t have health insurance. For that price you can buy an intermediate level of hospital and extras cover. If you’re a mid/high income earner the tax system is designed to have you in the ‘private system’ and flog you if you’re not.
30 June is also the cut-off date for the Lifetime Health Cover Loading. Under this program, people who don’t have insurance by the time they are 31 pay an additional 2% in premium for every year that they are over 30. For example, if you are 40 on 30 June, you’ll pay 20% more than everyone else. The reason this rule exists is to prevent people only taking out insurance when they have an immediate need, which would typically be when they are older.
Again it’s worth looking at basic cover to avoid this penalty. Note that the penalty only applies to hospital cover. If you take out extras cover there is no penalty if you didn’t have it when you were 30. You can get good quality hospital cover for as little as $15 per week.
Some funds will improve the benefits they pay on everyday services from 1 July. If your fund is doing this you can be sure that they’ll tell you – health insurers don’t often have good news.
Some funds rarely or never improve their benefits, or only do so for their preferred providers or on new products. I know my dentist puts up her rates every year, so if my fund isn’t doing the same thing I’m getting less value and higher gaps each time I go. If you’re not sure, ask your fund if they are increasing benefits this July. If not, why not??