7 Essential Questions to Ask Before Switching Your Medical Coverage Provider
Changing your health insurance sounds like it ought to be straightforward, see something cheaper, hop over, finished. However, cheaper doesn't mean a better value. Often the costs are hidden until you access the system, by which time, it's too late. The real cost of insurance is the extent to which it covers you. These 7 questions will help you take stock of what you're actually getting before you jump ship.
1\. Will My Waiting Periods Carry Over?
This is the first thing to check, and most people skip it. When you switch providers, portability rules mean your time already served on basic and general services should transfer to your new policy. But that only applies if you're moving to an equivalent or lower level of cover. Upgrade your policy at the same time and you could face a fresh waiting period on anything new. Ask your prospective insurer exactly what carries over and get it in writing before you cancel anything.
2\. What Tier of Cover Are You Actually on?
Insurance policies have tiers, Basic, Bronze, Silver, Gold, and the inclusions aren't always self-explanatory. Joint replacements, cataracts, and cardiac services may not be covered by a Basic or Bronze plan, or they'll be tagged in the small print as "restricted," which basically means the benefit is so small as to not matter in the real world.
So before you switch, double-check what you're actually paying for cover by treatment with your current insurer, and compare this with any existing conditions or likely major treatments for your household. Health insurance should match where you are in life right now, not where you were three years ago when you signed up.
3\. How Does the Gap Cover Work?
Additional payments when a specialist charges more than the set fee are some of the first annoyances that accumulate after changing funds. Some will have "no gap" or "known gap" arrangements with preferred specialists that greatly reduce this expense. Others won't.
Find out in no uncertain terms: does this fund have gap cover arrangements, who is a contracted specialist, and what is the highest potential gap associated with a procedure applicable to your circumstances? Pre-treatment financial consent from your treating doctor is crucial here. They're obliged to advise you of the likely expense before proceeding with treatment.
4\. Are Your Extras Limits Actually Usable?
Access the claims history from last year and analyze what has been used. Similarly, investigate the annual benefit limits related to any cover you're looking at. For instance, your current policy might cover $300 annually for dental and you have actually been spending $600, therefore, there is a $300 gap every year, potentially this could be covered by a better extras policy. Conversely, if you haven't claimed anything towards physiotherapy, you stand to lose that amount anyway.
Benefit limits are different for each insurer, and a seemingly good policy may limit optical cover to $150 or massage to $200, which are not the actual costs at all. Make sure your usage patterns match the benefit limits, rather than the anticipated limits in the future.
5\. What Happens With Pre-Existing Conditions?
If you already have a condition before you sign up for a new policy, most insurance companies make you wait 12 months before covering anything related to that condition. That's normal. But some companies have a much looser definition of "pre-existing" than others. For example, some will give you credit for the time you were insured under your last policy as long as it was within 63 days of signing up for a new one. Others don't limit how far back they'll check your medical records.
6\. Have You Accounted For Lifetime Health Cover Loading?
If you are 31 or older, it's likely you're paying more for private health insurance. Lifetime Health Cover (LHC) loading is added to your base hospital premium if you haven't taken out and maintained hospital cover since you turned 31. It's designed to encourage people to get private hospital cover earlier in life and to maintain their cover.
For every year you're aged over 30 and don't have hospital cover, you'll pay an extra 2% on your base premium. The loading is removed after 10 continuous years of cover.
7\. How Does the Insurer Handle Complaints?
This is something we might not consider as we're crunching the numbers. The Private Health Insurance Ombudsman is there to arbitrate disputes between fund and member, but you'd rather not have to go that far. Ask prospective funds how they handle member disputes, what their internal resolution process is like, and how long it usually takes.
Out-of-pocket expenses, and disputes with funds, are two of the most common reasons people take their funds to the Ombudsman. Knowing that you're dealing with a fund that's really upfront about what you're covered for is a kind of financial protection.
You're looking for the fund, and the policy, where what you pay fortnightly is roughly equivalent to what you can get back (taking into account the limits, conditions, and exclusions).
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