According to Choice, my health cover is junk. What next?

Ironically, one of the most common ways people end up with expensive and ineffective health insurance – AKA ‘junk’ policies –  is through trying to save a little money. Health insurance premiums rise every year, this year by an average of 5.59%. When a consumer realises this and calls their health fund to complain, one of the most common responses by the health fund is to offer a cheaper product to appease the consumer. This just ends up being an inappropriate level of cover.

A lot of fuss over a small saving
Sometimes more basic cover may be a good match to your lifestyle, but other times the result is a junk policy that doesn’t deliver when it’s really needed still costs a lot of money. Choice reports that health fund staff may not be giving the clearest information about what is and isn’t included, leading to nasty surprises down the road.

It’s also possible that a fund may call to promote downgrading an insurance package in exchange for lower premiums. This means some consumers may find themselves in the position of not being covered for a procedure they need because they have sacrificed that element of their cover to save money, without completely understanding the new commitment.

Accident or ambulance cover policies are among the cheaper private health options. A young and healthy person without much immediate risk of serious illness may find it an attractive option until they discover that it doesn’t cover them for the full treatment of their ailment. For example, many serious injuries will require ongoing treatment lasting much longer than the 90 day restriction imposed by some policies. According to the Sydney Morning Herald, the Australian Medical Association estimates that around 35% of policies now include restrictions, up from just 10% in 2009. Trying to pinch pennies on your policy may find you throwing money down the drain on a policy that may be two thirds the price of a more comprehensive option, but that you can’t use due to restrictions or doesn’t provide cover for many out-of-pocket costs.

 
What to look for in a new policy
Not everyone can afford the highest level of cover, but that doesn’t mean you should be paying for a policy that doesn’t deliver any real value. There is a lot of competition in the health insurance market, meaning you should be able to find a policy that delivers value on a budget you can manage.

If Choice has listed your policy as junk, you should consider finding a new one. You can call your existing insurer and demand a clear picture of what is and isn’t included in your policy, but that might result in further confusion.

Research and comparison is the key
If your policy is on the junk list, it’s time to find a new one. There are many ways to do this. One of the easiest is to use a free comparison service that specifically focuses on health insurance, like Choosewell. You can quickly compare your current policy with others that suit you and your families needs online in a few minutes. Choosewell also employ health insurance advisors to answer any questions you might have by phone. Best of all, there’s no fee.

If you do switch funds, be sure to ask about the effects of waiting periods on your Lifetime Health Cover obligations. Your LHC entitlements shouldn’t be affected by the transfer, provided you’re maintaining hospital cover, and waiting periods will only apply if you’re moving to a policy with higher benefits.

Contact Choosewell online or call 1300 421 154 to find the best health insurance for you and your family’s needs.