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Curious About How Your Health Fund Performs?

With the deadline fast approaching, the Private Health Insurance Ombudsman (PHIO) will be finalising the ‘report cards’ of over 35 registered health insurance providers which will be released at the end of March 2010.

The fifth annual State of Health Fund Report will provide information on private health insurance performance and service of delivery, comparative to industry results.

Coverage per state is a key performance indicator for the report. It will show the scope of your health fund from 1 July 2008 – 30 June 2009, in the following categories:

  • Percentage of Hospital Related Charges Covers
  • Percentage of Medical Services with No Gaps
  • Percentage of Medical Services with No or Known Gaps
  • Percentage of Extra Treatment Covered
  • Number of Private Hospital Agreements
  • Number of Day Hospital Agreements

In addition to coverage, the report also investigates the percentage of health fund’s management expenses as well as their share of complaints on benefits and services lodged with the PHIO.

For existing consumers, this report is a valuable resource for reviewing current health cover policies and make decisions about future membership.

For new consumers, it will give an overview of the different services available from individual Australian private health insurers and how they fared during the last financial year.

Will it provide you with the best overall fund? No but it does provide you with a list of factors that may be important in your decision to take out health insurance.

The best cover is one that caters to your budget, needs, wants and circumstance. As Acting Ombudsman Samantha Gavel recommends, health funds must be reviewed year on year. Use this time to figure out what factors are important to you and whether your health fund is still able to meet your changing needs for the coming year.


2010: The Year For Major Health Reform in Australia

Following two major reports outlining the effects of the aging population on our economy, Prime Minister Kevin Rudd declared that without policy change, State Governments will run massive deficits due to the rapid rise of health spending and limited growth of government revenue.

While health costs are growing at 11 per cent a year, tax revenue is growing at 4 per cent a year as a result of fewer individuals entering the workforce. If this continues, the Treasury projects that by 2045-46, the total health spending of all states will exceed 100 per cent of tax revenue.

Forty years ago, spending on health services and aged care amounted to some 1 per cent of Australia’s annual Gross Domestic Product, this figure has now increased to 4 per cent. By 2050, it is projected that it will increase to 7 per cent. In dollar terms, this would equate to $200 billion across 40 years. These figures do not include individual spending on private health insurance and out of pocket payments.

To overcome this threat to the sustainability of government budget and avoid the need to support a crushing deficit, the Rudd government is presented with two choices:

  1. Reduce spending on health services, pensions and aged care
  2. Boosting productivity and growing the workforce to increase tax revenue

Given the country’s aging population, reducing spending on health services and aged care is a far from feasible option, especially given that this money is also being invested in advances in medical technology that ultimately will improve health and increase longevity. With this, the government may be introducing a single funder model for hospitals, with the Commonwealth funding state run health facilities.

Therefore, the Prime Minister aims to reduce the slowdown in economic growth by improving productivity within the workforce by an average of 2 per cent per year. This action will ensure that the government can cope with the rapid increase in health spending in Australia without running into a deficit.


Take A Load Off

Lifetime Health Cover Loading

It’s easy to think you’re invincible when you’re young and have the world at your feet, but are you really that indestructible?

As technology is helping us live longer, our actions today will have repercussions on our future. So it’s important to consider health insurance at a young age to ward off grief and expenses later on.

Take George for example. From a young age he has always loved to play sport and still has a very healthy and active lifestyle. Unfortunately he needs to undergo regular physiotherapy sessions due to a minor knee injury from his youth. As he did not have private health insurance in his twenties, he was hesitant to get the proper treatment for his knee. Looking back, being insured would have saved him pain, time and money.

Benefits of getting health insurance at a younger age

Did you know that you will have to pay an additional loading on your premium if you’re not covered by age 30?

If you decide to get health insurance after your 30th birthday, and did not have hospital cover previously, you are required to pay a loading of 2% for every year after aged 30. Loading can reach up to a maximum of 70% on top of your premium.

Now aged 40, George has decided to take out cover for his family. Consequently, he has to pay 20% more than some of his mates who first took out hospital cover before they were 30. Only after 10 years of cover, his loading will finally be removed.

Currently in Australia more than 760,000 young people have private cover. This age bracket claims more than one billion dollars for hospital admissions in the past five years. In fact, one in six people aged between 20 and 30 with private hospital cover will go to hospital this year.

Don’t make the mistake of thinking you’re invincible, protect yourself at a younger age and avoid heavy loading later.


Researching Health Insurance

Researching health insurance is a difficult task. A lot of industry sites are a little confusing, and finding all the various funds can be time consuming. There are a few ways around this however.

Aggregator Sites

A number of sites offer aggregation services, for example there are directories like Word Of Web that have Health Insurance sections. There are also services that specialise in comparison, such as iSelect.

Search Engines

Search engines also offer a lot of choice, with a search for health insurance comparison on Google Australia providing a lot of good sites.

Word Of Mouth

Finally, perhaps the best way to review Health Insurance funds is to ask your friends. Are they happy with their provider? Is the service good? Do they make many claims?  Does it take long to get approved? word of mouth is the best indicator, so before you start, ask as many friends as you can.


Australian Open to Injury

Australia is currently in the grips of tennis fever. With the Australian open in full swing many may be inspired by the performance of the Aussie stars playing in the grand slam to try their hand at tennis, whether it be recreationally or for competition.

Although having a regular game of tennis can be a great way to stay healthy, for an unlucky few it could potentially trigger injuries such as ‘tennis elbow’ (muscle or tendon damage in the forearm), frozen shoulder and other, more general sports related injuries. Whether they be new, existing or recurring, one of the more common ways to treat the pain of sporting injuries and stay in the game, will be to pay a visit to the physiotherapist.

The need for repeated or prolonged physiotherapy treatments can often create a financial burden for households and individuals as at present, physiotherapy is classified as an ancillary service and as such, options for claiming such services on Medicare is limited to individuals who are eligible for the Enhanced Primary Care program, patients whom have chronic or complex care needs.

Private health insurance can, however, ease the financial pressure that repeated or prolonged physiotherapy treatments can cause. All of the major private health funds in Australia allow individuals or families to claim a number of physiotherapy treatments under general treatment, or extras cover.

Whether it be a standard option as a part of a comprehensive health insurance package, or as an added option in a more customisable health insurance budget package, there are options available for most consumers.

Many Australian private health funds will also allow the consumer to tailor their private health package to focus on a particular set of services, thus further increasing the value provided by membership, especially for those who require additional treatments such as chiropractic treatment or podiatry.

So regardless of whether you are a budding champion or just a recreational player, spending a little time to consider private health cover or re-evaluate your plan can help you rest assured and focus on your game.


Private Health Insurance Rebates in Australia

The Federal Government re-introduced three bills that would withdraw Health Care concessions for individuals and couples as their income rises.

Although previously rejected by Senate, the following reform package was resubmitted by the Government:

  1. Fairer Private Health Insurance Incentives Bill 2009 [No. 2]
  2. Fairer Private Health Insurance Incentives (Medicare Levy Surcharge - Fringe Benefits) Bill 2009 [No. 2]
  3. Fairer Private Health Insurance Incentives (Medicare Levy Surcharge) Bill 2009 [No. 2]

In a nut shell, these bills propose means-testing the Private Health Insurance Rebate and increasing the Medicare Levy Surcharge in July 2010.


At present, all Australians who are eligible for Medicare and who are members of a registered health insurer are entitled to rebates of 30%, 35% and 40% on their health insurance premium, dependent on their age:

Age Federal Government Rebate
Under 65 30%
65 to 69 35%
70 or older 40%

Under the existing system, individuals would receive at least 30 cents back from every dollar contributed to their private health insurance premiums; a concession that makes quality health care accessible and affordable for all Australians – no matter the type of cover, level of cover or income. The rebate may be deducted directly from your premium or simply make a claim in your tax return or in person at any Medicare office.

However, if the bills are passed, the entitlement decreases by 10% according to increase in annual income. The proposed thresholds are shown below:

Proposed Federal Government Rebate from July 2010

Singles Income Couples/Families Income Up to 65 years 65 – 69 years Over 70 years
Up to $75K Up to $150K 30% 35% 40%
$75K - $90K $150K - $180K 20% 25% 30%
$90K - $120K $180K - $240K 10% 15% 20%
$12K + $240K+ 0% 0% 0%


Australian taxpayers who do not have private hospital cover must pay a 1% surcharge on their taxable income. (This is in addition to the Medicare Levy of 1.5%)

If approved, the Federal Government propose the following changes to the existing income thresholds and increasing the level of surcharge as shown here:

Singles Income Couples/Families Income Proposed
Medicare Levy Surcharge
$75K - $90K $150K - $180K 1%
$90K - $120K $180K - $240K 1.25%
$120K + $240K + 1.5 %

Changes to the Private Health Insurance Rebate and MLS are yet to be approved and if approved, will not take effect until July 2010. More updates on the rebate and other news about the health care system coming soon.


Changes to the Extended Medicare Safety Net (EMSN)

From the 1st of January 2010, the Australian Federal Government introduced a cap on some services paid through the Extended Medicare Safety Net (EMSN); an additional rebate for individuals or families who incur out-of-pocket costs for out-of hospital services including general practitioners and specialist visits.

Prior to this change, when an individual or a family’s out-of-pocket costs exceed a certain threshold amount in a calendar year, 80% of out-of-pocket costs incurred through the use of out-of-hospital services is paid through the EMSN for the rest of the calendar year.

For example if Jane undergoes a pregnancy scan which costs her $200. She will receive $60 back from Medicare under the standard Medicare benefits Schedule rebate, leaving her with $140 out-of-pocket cost.

Previous to 2010, if Jane had reached her EMSN for the year, she would receive $112 back from Medicare under the EMSN (80% of out-of-pocket). Therefore the maximum Medicare benefit Jane could claim was $172.

However, due to the introduction of benefit limits, she can only claim a capped amount of $35.55 under the EMSN rebate. Add this to the Medicare Benefit Schedule rebate; Jane would be only eligible to claim a maximum Medicare benefit of $95.05.

Services affected by new EMSN Benefit Limits include:

  • Obstetrics services
  • Some pregnancy related ultrasounds
  • Assisted reproductive technology (ART)
  • One type of cataract operation
  • Injections of therapeutic substances into an eye
  • Hair transplants for treatment of hair loss as a result of disease or injury
  • One type of varicose vein treatment

What does this change mean?

If you or a family member needs to see a doctor or have medical tests regularly you could end up with high medical costs. The new caps on EMSN benefits can have a dramatic affect on out-of-pocket costs. If you or a family member needs to undergo any of the following services in the near future...

  • GP and specialist consultations
  • Ultrasounds
  • Pap tests
  • Blood tests
  • CT Scans
  • X-rays

Its time to consider how your health insurance can continue to provide security for your family.


Private Health in America

In his weekly address, President Obama has urged Congress to revolve legislative issues that are delaying the health reform being signed into law in the coming weeks.

With average health insurance premiums increasing by 100% since 2000, it is no wonder many families in America are struggling to find an affordable health insurance premium under the current health system.

Obama’s Health Insurance Reform aims to improve the health system by providing more security and stability to those who have coverage, provide coverage to those without and reduce the cost of health care for families, businesses and government.

If all goes well, there will be immediate benefits soon after enactment of the bill.

These include:

  • Citizens with pre-existing illness would be able to buy affordable insurance
  • Children with pre-existing conditions would no longer be denied coverage
  • Small business owners who could not afford to cover employees would receive tax credits to buy insurance.

These benefits are due to take effect within the first year of reform. With many changes to come, President Obama aims to reach long term goals of improving America’s health system.

Health Reform Progress

Children’s Health Insurance Reauthorization Act ensures quality health care to 11 million children

American Recovery and Reinvestment Act protects health coverage affordable for Americans who lose their jobs

Recovery Act invests over $22 billion into the areas of:

  • Reducing medical costs
  • Improve quality of health services
  • Ensure Patient Privacy by computerising medical records
  • Research into best treatment decisions
  • Training next generation of doctors
  • Promoting prevention and wellness to improve America’s health

Hospital Care

One of the benefits of private health insurance is the opportunity to select your choice of hospital but how much do you actually know about them?

A recent debate has highlighted the need to make information about hospital performance available to the public, especially information about preventable complications occurring during hospital care.

In America, health insurance companies may not pay extra costs for serious complications which the hospital could have prevented such as objects left in a patient after surgery, air embolisms and serious hospital infections, labelling these as “never events” that is, events that should never occur in a competent hospital facility. This system of transparency has been introduced in New York. The scheme holds hospitals accountable, in turn assisting to improve medical services.

This concept is new in the US but there’s no doubt the focus to improve quality and safety as well as keeping costs down will be prevalent for both the Australian public and private health care systems. As a potential or would-be patient with private health insurance, equipped with the choice of hospital, wouldn't you prefer a system of transparency? Let us know what you think.


Healthy Start to 2010

The holiday season is a time of celebration, a chance to bid farewell to the year that was and welcome the year that will be. Everyone knows Christmas is all about overindulgence – a time to relax and party with friends and family; whereas New Years is the time to consider the course of action for the next 12 months; thus the perfect time to make New Year Resolutions.

The most popular resolutions that make the list every year relate to wealth and health and well-being: To manage money better and to become healthier in the New Year is important to most people. Naturally, it comes back to Health Insurance. Whether you make the decision to take more control of your money or be eat or live healthier, these lifestyle changes can be reflected in your health insurance policy.

Thinking forward for 2010 you should review your health insurance options, it’s an opportunity to make the changes you’ve considering. Here are a few simple items to help you approach Private Health Insurance in 2010, thinking about how you invest your money and your dedication to your health and your family’s health.

1. Identify what you need

There are many health insurance products on the market, identify what is still important to you. Ask yourself:

  • What is my current cover, is it still relevant?
  • Do I want hospital cover, extras cover or both?
  • What are the inclusions that I “must” have?
  • Do I want basic, medium or full cover?
  • How much can I afford to pay up-front as a premium?
  • Am I prepared to pay an excess or co-payments in exchange for a lower premium?

3. Seek advice

Consult with friends and family in similar circumstances to you. Their experience is important as they may highlight some issues that you did not think of. Reflect on the previous year, are you getting the most out of your current cover or do you need to 'trim' down? Balance this personal experience with expert advice. Seek information from your doctor about your medical history and possible risk factors that can affect your health in the future. Their advice is important as they have a documented account of your health.

2. Identify options to match your needs

Health insurance products are designed with a wide population in mind. More often than not these packages may offer a full range of inclusions which may not be appropriate for you. Remember, more inclusions may mean higher premiums so you may be paying what you don’t need. So take a closer look and identify those that are relevant to you matching your individual needs.

4. Research

Once you understand what you need, it’s time to research health cover options. Remember, planning now saves you time and money later. As with any investment, look at benefits vs. cost. Each health fund has its own unique suite of programs, rewards and discounts, identify a suite that reflects your lifestyle but also meets your budgetary requirement.

Begin the year with a healthy start, devise your health insurance plan for 2010.