When Should You Update Your Health Insurance Policy?

Should you compare health insurance? If you haven’t checked your policy for a few years – or if your life situation has changed – it’s probably a good idea.

If you haven’t dusted off and reviewed your private health cover for a few years – or perhaps since Malcolm Fraser was prime minister and converted Medibank from the nation’s first public health scheme to a private health provider – it’s time to take action.

We’ve already digested the news that health insurance premiums are increasing this year by an average of 5.6% and this should have jolted us into action. We should have wheeled our private health policies into the emergency department and given them an annual checkup there and then. But there are many things we “should” have done, aren’t there?

Keeping your private health insurance policy up to date with your lifestyle is likely to benefit your budget so it’s well worth doing whenever anything changes in your life. For example, if you’re planning to start a family, the kids have grown up or either you or someone in your family has developed a health issue.

Anytime is a good time to review your policy to make sure you’re getting value but if you need a prompt, why not go over your policy when you receive your tax certificate from your health fund in July?

What are your future health insurance needs?

It’s tricky making decisions based on future needs because, the truth is, you never really know with pinpoint accuracy what your future needs will be. Anyone who has ever received a diagnosis of chronic or potentially terminal condition knows how your life, and your medical needs, can change in an instant. No-one can foresee the need for things like cardiac care or kidney dialysis.

You may have finished having a family but are still paying for obstetric cover. If you play sport and are approaching your 40s, you will need to cover procedures such as knee reconstruction. Policies aimed at younger people tend to exclude joint replacement but will include pregnancy.

Those with older children may be disappointed to learn their policy does not include orthodontic work but they are paying for obstetrics.

When planning to start a family, the most important thing to remember about health coverage is to make sure you purchase your private health insurance policy before you get pregnant! Most health funds require you to be covered for obstetrics for at least 12 months before your baby arrives.

Confused? Don’t be. The whole aim of the revision exercise with your hospital and/or extras cover is to make sure you’re not paying for cover you don’t need or you are missing out on crucial benefits. The tougher economic climate this end of financial year means more people are shopping around for a better deal.

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Your hospital plan: what does it cover?

Because of the uncertainty of predicting future needs, as mentioned above, you probably want a hospital plan with as few exclusions as possible. What does your hospital plan cover?

For example, it is usually the case for plans offering basic and even medium cover to exclude or limit cover for cardiac-related services, cataract and eye lens procedures, pregnancy and birth-related services, assisted reproduction, hip and knee replacements, dialysis for chronic renal failure, non-cosmetic plastic surgery, rehabilitation and psychiatric services. Some exclude all of the above.

To help you, compare the equivalent level of cover offered by other health insurers here. It’s also not a bad exercise to start at the top and work your way down to what you can afford.

Your extras plan: what does it cover?

The best extras plans will give you high benefit limits for all your ancillary health needs, including dental and optical care, physiotherapy, remedial massage and chiropractic. Comprehensive extras plans also cover psychology, pharmaceuticals not covered by the PBS, hearing aids and blood glucose monitors. It is easier to work out the level of cover you’ll need from an extras plan than it is for hospital cover. That’s because it’s easy to calculate how much you’d spend in a year on glasses, massages etc. If your premiums are less than the rebates you receive, you know you’re ahead of the game.

To work out if your extras health insurance is offering you value for money, request an annual claims statement from your fund. This shows the total benefits you received in the last financial year. Then compare your premium with your extras benefits to see if you are paying more than you’re getting in return.

Have you used your lifestyle heath cover?

Most people are not aware of the lifestyle programs offered by insurers, such as HCF’s Health Management programs and MBF’s In2life, which puts members in touch with medical professionals and free tailored health programs depending on your level of cover. MBF also offers free postnatal counselling. And some extras policies offer services such as massage or gym classes and even sunscreen.

With the increasing sophistication of programs being offered to members by health insurers, it’s worth double checking what you may be missing out on simply because you haven’t reviewed your policy in a while. You may find a new world of added services will open up to you.

Reviewing your health insurance policy at key stages in your life – getting married, having children, becoming divorced, widowed, aging – is a good habit to get into. These days, it’s easy to compare online and if you still have queries, always phone your health insurer for clarification. It may well be that you already have the best cover for your circumstances, but you need to know that rather than waiting till illness strikes before realizing your policy falls short.