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:
- Fairer Private Health Insurance Incentives Bill 2009 [No. 2]
- Fairer Private Health Insurance Incentives (Medicare Levy Surcharge - Fringe Benefits) Bill 2009 [No. 2]
- 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.
PRIVATE HEALTH INSURANCE REBATE
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% |
MEDICARE LEVY SURCHARGE
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.
Comparing Australian Health Insurance Cover
Research shows there are many triggers that lead us to buy a health insurance policy.
These include:
- Having a Baby
- Getting Married
- Moving out of your parents house
- Retirement
I recently got married and tried to compare Health Insurance Covers and it’s really difficult to make a true cost/benefit ration of competing health funds. What I did find interesting though was that contrary to my expectations there are no savings by moving from a singles Health Insurance Policy to a Couples Health Insurance Policy. In fact, when I visited a local Health Fund they indicated that Couples Health Cover was developed decades ago with benefits back then but regulatory changes have since minimised this benefit.
Based on this I decided to pull out two singles cover for added flexibility.
The next area to look at is whether you want Hospital & Extras Cover or Just Hospital Cover. The way I see it, Hospital Cover is your insurance policy just in case something unexpected occurs (and this is your safety blanket) rather like car insurance. Extra’s insurance on the other hand is something you will use regularly and based on some costings for me and my wife, I ended up ahead overall by having this cover.
Therefore, I felt that for me and my partner hospital & Extras is the best option offering good value (in terms of the amount we could claim on yearly) while providing a safety net if we really did get sick/injured.
In later posts I will go through a few of the hospital and extra’s policies in more detail as there seem to be some complicated models (ie Medibank).
Extreme Weather brings on the Unwanted Sniffles
The second half of the previous post was postponed due to an unexpected bout of sneezes and coughs, brought on by the extreme weather. With temperatures reaching up to 40 degrees yesterday, it can’t be good for the immune system. I say buckle up for the unpredictable weather to come as it will definitely have an affect our health and our daily activities.
This brings us to the next topic, the benefits of health insurance and why it’s worth thinking about (especially when you feel sick as a dog)
Let’s begin with the basics, when considering private health insurance, you automatically think of three types: Hospital, Ambulance and Extras.
Hospital Coverage may include accommodation, theatre fees, intensive care, drugs, dressings, and other consumables, pharmaceuticals and medical services.
Ambulance Coverage may include transport costs (road, air or sea) and any paramedic treatment.
Extras may include cost for dental, physiotherapy, occupational therapy, speech therapy and acupuncture.
Although distinct, these types often overlap. You’ll find that most health insurers offer combined policies that cover health services across the board. The key is to find the combination that works for you; alternatively you may wish to be more selective in your approach, purchasing extras only. It really depends on your lifestyle, who you want to cover (singles, couples, family etc), your age, and other variables…
With more details soon to come (i.e. scenarios that might be relevant to you), the purpose of this post is to simply highlight the fact that purchasing health insurance is a way of ensuring peace of mind. Even if you live a healthy lifestyle, have no history of serious illness or have no family to worry about, health insurance is a security that is necessary in this day and age. In most instances, basic coverage will provide you with the following benefits:
- Choice of doctor
- Choice of hospital
- Control over waiting times, when and where you’ll be treated
- Helps with cost of services not provided by Medicare
Now that you’ve got the basics of health insurance, we'll follow up with more tips, scenarios and facts to help you along the way. Happy Hunting.