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Health Insurance Basics

Saving money on health insurance is important, but the strategies to do so are not so obvious. Here are seven ways to control your health insurance costs:

  • Make sure you are familiar with all of the rules of your health insurance plan, and that you follow them. Your plan will have rules regarding pre-authorisation and provider networks. If you fail to adhere to these rules, you could find that you have little or no coverage available to you for your treatment. Do not make assumptions about the plan. Read your policy terms and ask questions of your plan’s representatives. Remember that a lack of information can cost you money.
  • You may be able to opt-out of certain coverage features that you do not need. Mental health services, chiropractic services, and maternity stays are often not needed by everyone. In some states, health insurance companies are allowed to offer basic health insurance policies that include only mandated items of coverage. Choosing such a policy is a less expensive option.
  • If you are married, and both you and your spouse have health insurance, check each policy to see if spousal benefits are available. If so, you can eliminate the other one as coverage under spousal benefits is available to both the husband and the wife.
  • Be prepared for emergencies by becoming familiar with the full aspects of your health insurance coverage. If when an accident occurs you are familiar with which hospitals and physicians are included in your network, you will be in a better position to make confident decisions in an emergency. This information should be kept handy in case you need it quickly.
  • Saving money on prescription costs will help your overall health insurance strategy. Simple things that you can do include asking for free samples from your physician, using generic drugs, or investigating the availability of reduced cost medications. There are typically eligibility requirements for programs such as these as they are primarily designed for those with low income or no insurance coverage.
  • Do you have any bad habits? If you quit smoking you will become a more desirable candidate for insurance coverage. Smokers automatically pay higher premiums. You won’t see immediate results, as it may take about 3 years to qualify for better rates enjoyed by nonsmokers.
  • Exercise, and get fit. The obese will pay more premiums than smokers, the aged, or alcoholics. Getting in shape will not only benefit your wallet but will help you live longer and healthier. Healthy people experience less stress also.

Should I Get Private Health Insurance

Medicare, the Government health insurance system, provides Australians with universal healthcare cover. Available to all Australian citizens, Medicare provides access to free or low-cost services such as doctors, outpatient care, hospital care, and some dental procedures. Permanent residents who are not Australian citizens may also qualify for the scheme.

What private health insurance offers is greater choices about how your healthcare is administered, e.g. which hospital, doctor and type of accommodation. The private cover also often offers reimbursable extras such as glasses, massages and other items.

For severe ailments, however, even private patients are put back into the public health system. The private hospitals are generally just not well enough equipped to cope with critically ill patients and specialized emergency procedures. Examples of conditions that tend to be treated within the public system are head trauma, cancer, heart surgery, organ transplants, dialysis, and other items. Private hospitals usually take care of conditions like childbirth, shoulder and knee reconstructions.

What does private health insurance cover?

Depending on the level of cover, private health insurance covers some or all of the expenses of being treated as a private hospital patient in a public or private hospital.

Private hospital patients are charged for their accommodation, theatre fees, drug costs, and doctors’ fees, as well as many other costs, but their insurance company will reimburse them for large portions of these costs.

In addition to hospital care, private health insurance can cover some or all of the costs for many medical services Medicare does not. These may include podiatry, chiropractic treatment, dental treatment, and many other procedures. It can also cover more “wellbeing” options such as glasses and contacts, as well as some natural therapies and acupuncture.

For elective surgery (non-life threatening surgery) public system waiting lists can be very long, and private patients can book into the hospital of their choice, often a lot sooner than is possible for a public patient. An example might be elective knee or shoulder surgery.

Ultimately, the decision to go private is a very personal one and tends to depend on your household income, fitness obligations and whether you are carrying any injuries or experiencing any chronic health conditions. Most Australians would benefit from private medical insurance, and it is often a case of choosing the right plan rather than whether to choose it or not.

How To Save Money On Your Private Healthcare

With health insurance costs to rise an average of 6% this year, families may struggle to find the extra $200 required for private health cover.

What options are there for people who want to save money in light of rising costs? Well, there are a few:

Pay upfront – Avoid the April price increases and lock in the 2009 prices by paying your annual health insurance premium upfront. If you pay your entire 12 months upfront you lock in the prices that period, putting off the effects of an increase until next year (at which point you could lock in another 12 months)

Based on the average price rise across funds/products, this could equate to a saving of 5.78% over the year (a saving of around $170 for family cover)

Pay by Direct Debit – Many Companies offer a discount for paying premiums by Direct Debit. The nib gives a 4% discount for direct debits paid from a cheque or savings account, ensuring that those who are not in the position to pay upfront can still take advantage of discounts and savings.

Shop Around – The average price increase is 5.78%, but some of the larger organizations have only increased their prices by 5.74%, whereas some smaller Companies have increased their premiums by a whopping 7%. Always check the level of cover you are receiving and shop around for an even better deal. By combining this with the other tips above, you could be saving big time!

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