HEALTH INSURANCE HEALTH FUNDS CRIPPLING OUR HOME BUDGETS
This car crash of a system is a farce A Another round of health insurance price hik hikes mean it h has never been more importantt to find the right cover. It’s time to unravel your options, writes s Sue Dunlevy
WHEN you crash your car, the insurance covers the full cost of repairs minus your excess, but when it comes to health insurance you can’t find a single product that does the same.
Australians are paying for their health four times over — once through the Medicare levy, then through their health fund premiums and they must then pay an excess when they use it. The fourth bill is the most galling of all — the gap fees four in 10 people have to pay their surgeons and anaesthetists that their insurance does not cover at all.
Proper health insurance, the type that actually covers you for everything, is now so expensive it rivals mortgage payments and is proof the system is broken.
We live in a country where the government uses financial penalties that force you to buy health cover once you turn 30 or earn an income more than $90,000 a year. It also spends over $6bn of taxpayers’ money subsidising the product.
The idea behind these carrots and sticks is to relieve pressure on our overburdened free public hospital system.
But even with these subsidies the product has now become so expensive two in three Australians can only afford cover that excludes many key procedures which means they will still have to rely on the public hospital system if they get sick.
The failure to properly index Medicare rebates, which are used as the basis of health fund rebates, means health insurance covers so little of your costs the smartest financial decision if you are having a baby or get cancer or have an accident is not to use your health fund and risk gap fees of $2000 to $20,000.
You are better off relying on the free public system where you will be treated as a priority patient and get speedy treatment at no cost.
HEALTH fund premiums jumped by up to 15.5 per cent this month with many top Gold Hospital and Extras products now rivalling a mortgage at a crippling $800 per month.
The Sunday Tasmanian today unveils a simple new tool to help you locate the cheapest policies and we reveal the two cheapest Gold policies in the nation.
Our major investigation has found price rises for many products far exceeded the 2.74 per cent average rise announced by funds.
Fifty three hospital policies had a premium rise of $20 or more per month for singles or $40 or more per month for families and there were further hikes for extras cover.
We uncovered Bronze and Silver policies that cost more than Gold and found in some cases opting for a $750 excess on your policy could save you more than $750 off your premium.
And we discovered a staggering 595 policies were retired on March 31 while hundreds more new ones were launched.
Of the big four health funds Medibank was cheapest in NSW and Nib had the most expensive Gold hospital product of the four funds in every state.
“Premium pricing is impacted by a number of factors including services covered, past claims experience as well as future claims inflation for each individual fund. As such, there may be difference in pricing between funds,” nib chief executive – Australian Residents Health Insurance, Ed Close said.
Private Healthcare Australia CEO Dr Rachel David (pictured below) said the cost of top cover was now becoming unaffordable at $800 per month.
“The market for Gold hospital cover has been quite challenging, a lot of funds have withdrawn at that level,” she said.
Those burnt by premium rises and looking to switch cover must battle an impenetrable maze of 104,000 health fund policies, Choice’s health spokesman Dean Price said.
“The great disparity in premiums and what different funds offer in cover only adds to consumer confusion and doubts about health insurance value and we need a searching inquiry,” Consumer’s Health Forum chief Leanne Wells said.
For the first time the Sunday Tasmanian is offering to help readers steer through the confusion with a simple new tool that reveals the cheapest hospital policies.
Using official government data, the tool produces a league table which lists Gold, Silver, Bronze and Basic health hospital cover from cheapest to most expensive in each state. We could not cover extras policies because this was too complex.
The analysis showed the best value non-corporate policy in the nation is St Luke’s Gold hospital cover with a $1000 excess which costs singles $170 and families $341.
At this price it’s nearly half that of Gold policies offered by some bigger health funds which have a maximum excess of $750.
Under government rules, all Gold health fund policies have to cover people for every procedure including pregnancy, mental health and joint replacements so this policy provides the highest level of cover available with no exclusions.
This policy is even cheaper than some low level BronzePlus policies offered by CBHS health fund which have a $750 excess.
And the fund — a not-forprofit based in Tasmania which offers heath insurance in NSW — deferred its April 1 premium rise by three months.
The downside is the policy won’t be of use if you are trying to avoid the government’s tax penalty that requires singles earning over $90,000 and families on over $180,000 to have insurance or pay a higher Medicare levy.
To avoid the tax penalty you have to purchase a policy with an excess below $750 for singles and $1500 for families.
If you’re in this category Mildura Health Funds’ Five Star Gold costs just $202.25 for singles and $404.50 for families and is available in NSW.
Breast Cancer Network