The perks and price of going private

The increased cost of health premiums coming into effect from 1 April has already prompted four in 10 privately insured Australians to reassess the value they are getting from their cover as new research revealed Australians’ use of their insurance inclusions.

Research from insurance comparison service comparethemarket has indicated that 43 per cent of privately insured Australians will compare their options this year, potentially switching to a different policy when premiums are hiked, despite this year’s rate rise being the smallest in 19 years.

It also showed that a number of Australians aren’t getting the full value out of the health insurance.

Four in 10 (43 per cent) of respondents made just one or two claims to their health insurer in 2019, while 39 per cent made five to 10 claims.

Only 11 per cent made between 10 and 15 claims.

When asked what they found most valuable from their health insurance, almost one-third (29 per cent) nominated extras such as chiro, physio, remedial massage and podiatry.

A further 26 per cent nominated unexpected health issues such as in-hospital treatment for an accident or injury and cancer treatment as being the most valuable.

In terms of what was actually used, two-thirds (64 per cent) of privately insured individuals said they, or their families, had used dental services such as major dental, orthodontic and endodontic.

Just over half (56 per cent) also used their “extras” coverage to claim on optical services, which also took the crown as the highest-claimed health service among older age cohorts.

Commenting on the findings, comparethemarket’s health expert Anthony Fleming said “it’s crucial consumers don’t get complacent and remain health- and money-wise in 2020”.

“Health cover can be very valuable when treatment is not covered by Medicare outside of the hospital or patients opt to be treated in a private hospital.”

He outlined how “many of these medical treatment bills would otherwise be very expensive without private health cover, and this is when it becomes most valuable to consumers”.

Highlighting how this year’s increase in health insurance premiums is prompting “a significant proportion of policyholders to seriously consider the importance of their health cover”, Mr Fleming said it’s interesting to see the number of consumers who will shop around in 2020.

“We recommend that those who are considering taking out private health insurance or switching to a new policy do so before 1 April when the rate rise takes effect, to enable them to prepay their years’ worth of premiums in advance and lock in their health policy cost for the next year,” the health expert advised.

Mr Fleming also recommended that Australians regularly review their cover “to make sure it’s still relevant to their needs and circumstances, as well as their back pocket”.

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Article reproduced from Nest Egg by Grace Ormsby.

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Zac Zacharia (Managing Director) has been assisting clients to create wealth and secure their futures for over 14 years.

He is also an accomplished presenter and educator

Co-authoring the popular investment book, Property vs Shares.