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At different stages of the life cycle you need different kinds of health cover. You also place a different emphasis on the types of extras that you value. From 30 of age onwards people often start to look more for preventative activities – such as gym memberships, massage, acupuncture and other “lifestyle” extras – to be included in their health insurance premiums. If you have not yet settled down with a partner it is the decade when most people are likely to settle down and start a family. It is also an age at which you are better able to afford more comprehensive health cover. The health insurers are keen to get the mid-20s to 30-somethings on board, as, generally speaking, they are still fit and healthy.
Compulsory private cover
As well as the extras and family considerations from age 30 there is another important aspect of health cover to be aware of. Over the age of 30, the Government the charges a penalty if you do not have private health insurance. Each year a person is over 30 and without private health insurance a two percent loading is added to the eventual cost of their premium – capped at a maximum of 70 percent. (People exempt from this penalty include those born before July 1, 1934.) For more information visit http://www.privatehealth.gov.au/faq.htm, a Government website that explains this penalty system in greater detail.
On the other hand, those who have purchased private health insurance before their 31st birthday, and maintain their cover, may be offered loyalty bonuses by their insurer for being a long-term customer. As well, the Australian Government rewards those who have had 10 years’ continuous private health insurance membership with a loading (penalty). The reward is the removal of the loading.
Private health insurance benefits
A perk of having private health insurance is being treated as a private patient in any hospital. This means having a choice of doctor, hospital and treatment time. As well, when it comes to elective surgery (surgery for a non-life-threatening condition) generally shorter waiting periods can be expected, as priority is given to people with private cover.
As a privately insured patient, there are also attractive policy benefits (extras) to choose from that may help reduce your day-to-day, out-of-pocket expenses for items such as glasses, massage, dentistry and chiropractic treatments. Some providers also offer cover for natural therapies.
Planning a pregnancy
For those wanting to start a family, get in early – take out your cover well in advance of falling pregnant to avoid penalties and fees. Most funds have a waiting period of at least two months before any cover actually begins and for pregnancy this waiting period is 12 months. If you’re going to play it by the numbers, this means it would be wise to wait four months after buying your insurance before falling pregnant. That way your baby will arrive after the waiting period has concluded. That said, costs for medical care during your pregnancy may not be claimable – although the birth will be. Check the fine print and be smart about it. You may have health issues during your pregnancy that require special care.
What’s it cost?
An average private health insurance policy, providing basic hospital cover and mid-range extras, can cost between $60 and $100 a month. Basic hospital cover can take care of such things as transportation in an ambulance, pregnancy and birth-related needs, cardio-thoracic surgery, major eye surgery and hip and knee joint replacements. Top benefit cover may include full cover for hospital accommodation, no excess on day surgery and night stays in hospital, and extras cover for optical, dental, orthodontic and chiropractic needs.
There are many providers to choose from and the different combinations of extras can get very confusing. Sit down either alone or with your partner if you have one and identify your must-haves and nice-to-haves, or check back in with Insurance Buddy to do the health cover quiz. It will help you get clear on what your needs actually are. It is easy to be seduced by attractive extras on offer – but if you are saving for a home or paying a mortgage it may not be the smartest way to spend your money at this stage of life.
