Changing Health Funds
You have a right to switch to a new private health insurance company or policy if your existing plan no longer meets your needs. Two main types of cover that exist in health fund policies are hospital and extras cover. Here are some things to consider about your existing policy as well as the new policy you are thinking of switching to.
How much will I have to pay for it?
How long do you have to wait before benefits are paid?
What is the excess if I go to hospital and are there any co-payment options available?
Are there any medical procedures and treatments that are not covered under my hospital plan? And am I OK with not having these?
Does this private health fund have agreements with hospitals and doctors – sometimes referred to as a preferred provider network? e.g. Medibank Private is affiliated with its Members’ Choice network. Undergoing treatment at preferred facilities may offer reduced fees and/or faster processing times for claims.
How does this health fund’s gap cover scheme work? Certain funds may meet some or all of the cost of out-of-pocket expenses. What can I do to minimise this cost?
Am I exempt from paying the Medicare Levy Surcharge if I sign up to this policy? The Medicare Levy Surcharge is an extra 1 per cent tax out of your salary.
Waiting Periods
Health insurance companies may enforce the following waiting periods for new members who join their hospital cover:
A two-month wait for most benefits.
A two-month wait for psychiatric, rehabilitation or palliative services.
A twelve-month wait for pre-existing ailments. Keep in mind a condition can be defined as pre-existing even if it was not diagnosed at the time of joining.
A twelve-month wait on pregnancy and birth-related care.
Waiting periods cannot be put in place for longer than these times under law.
Some funds may have special promotions for new members where the two-month waiting periods are waived. Some health insurance companies may waive these periods for transferring customers too. It is always a good idea to ask before joining.
If you have not sat through the entire length of the applicable waiting period, you will have to sit out the remaining time with your new fund. Waiting periods may apply if you upgrade to a better level of cover. Signing up to a less comprehensive level of cover with fewer benefits means the conditions of the new policy apply immediately.
Hospital Cover And Limitation Periods
Hospital cover may come with limitation periods for certain medical procedures. If a member selects that service, the fund will only pay a limited benefit for a certain length of time.
If you were covered for these services and had sat through the appropriate waiting period in full, and transfer to a new fund with limitation periods in place, the new fund cannot apply the new limitation period to you.
Switching Extras cover
Read the following the check list. It offers some food for thought if you are thinking of changing to new extras cover policy.
Am I covered for treatments I’m most likely to use? Make a list of all the services you are interested in, including dental, optical, natural remedies etc.
Do any waiting periods apply? Your new fund may waive these waiting periods if you previously held extras cover with another provider.
How much will I get back for each service I use? Try to find old receipts if you can and ask how much you would get back for these now.
What are the annual limits like? Health insurance companies may impose limits on what you may claim and the total number of services you use in one year.
Do the limits increase for long-term members?
How much is it? The fund may reduce your fees if you pay in advance or opt for direct debit.
Waiting Periods For Extras Cover
Generally speaking, some of the most common waiting periods are:
Two months for general dental and physiotherapy.
Six months for general optical and eyewear.
Twelve months for major dental.
One, two or three years for major work such as orthodontics or laser eye surgery.
Remember: You can have hospital cover with one health fund and extras cover with another fund. There is no need to have both with the same provider if you don’t want to. You will still receive the government’s health insurance rebate on both.
Find out more about health insurance at HealthInsuranceCompanies.com.au.