Health insurance premiums may unnecessarily cost you cash

Written by The ReReport
As seen in the Source link, written by on 2019-07-08 23:28:32

Households are wasting hundreds of dollars a year by failing to check and compare their private health insurance, research has found.

And a new system designed to make health cover simpler appears to be confusing many consumers rather than helping them.

As the health insurance industry introduces a tiered system of gold, silver, bronze and basic policy options, it’s more important than ever to check your cover.

Consumer group Choice, which recently released an online tool to help people decide which tier suits them, says health insurance this year replaced electricity costs as the number one financial concern for households.

media_cameraChecking your private health insurance cover could save you hundreds of dollars.

It says basic cover is really just designed to stop people paying extra tax, bronze cover is a back-up for healthy people, silver includes an extra 26 categories including cancer and heart surgery, while gold has “all the bells and whistles”.

Choice spokesman Jonathan Brown said health funds had until April 2020 to implement the new tiers but most major insurers had already done this.

“Existing customers may be moved from their older policies across the year,” he said.

“Some insurers have had really comprehensive communications to explain the changes to you, and others have left a lot to be desired.

“This system was meant to make private health insurance simpler, but we’ve found it’s added more confusion.”

Laura Crowden from iSelect suggests checking your policy for potential discounts.
media_cameraLaura Crowden from iSelect suggests checking your policy for potential discounts.

Meanwhile, research from comparison website iSelect has found that more than two-thirds of customers who have switched health funds in the past year saved money, with half saving at least $300 a year and one-third saving more than $500.

Anita Davidson, 54, recently examined her family’s health cover and managed to upgrade to include extras and still pay less than she was previously.

“I think a lot of people don’t bother because they are really busy and expect it to take a lot of organising,” she said. “I really saved heaps of money. I was actually shocked.”

iSelect spokeswoman Laura Crowden said its research had found that 40 per cent of policy holders suspected they could probably find a better health insurance deal.

“Too often customers stick with the same outdated policy out of convenience despite it no longer suiting their needs or costing more than it should,” she said.

“Most of us believe we simply don’t have time to review our policy and think it won’t be worth the hassle. Not regularly reviewing your policy means you could be paying for things you don’t use or not be covered for what you actually need.”

Ms Crowden said people could save money by increasing their excess, reviewing whether it was worth paying for extras, and looking for benefits such as direct debit discounts, free dental check-ups or excesses for children being waived.

Originally published as Why you must check your health cover