It’s no secret that private health insurance can seem confusing. With loads of different terminology and jargon, it’s easy to feel like there is so much you just don’t know. To help, we’ve pulled together a cheat sheet with 4 things you should know before you pick the right policy for you.
- Know the difference between hospital and extras cover: When picking a policy, you can choose 1 of 3 types of cover: hospital cover, extras cover, or a package that includes both. ‘Hospital cover’ helps pay for the cost of a member's hospital stay as a private patient, including payments towards accommodation and in-patient medical treatment. ‘Extras cover’ helps cover some of the costs of non-hospital services that are generally not covered by Medicare -- like dental, optical, physio, chiro and remedial massage.
- Understanding waiting periods: A waiting period refers to the amount of time a member must serve after taking out their cover, before they can access the benefits included in their policy. Remember, if you’ve had health insurance with another fund in the past, and are switching to a new fund, you may not need to re-serve the waiting periods. Check with your new fund to find out if you need to re-serve the waiting periods for hospitals and extras cover.
- Know about your preferred fund’s suspension policies: It’s good to know that most funds offer a suspension policy, where you can actually put your policy on hold if you’re going overseas for a few years. The amount of time you can suspend your policy depends on the insurer, but as an example, Medibank offers up to 4 years’ suspension for those spending an extended period overseas.
- Know the jargon and what key terms really mean. Here are a few common terms explained:
- Premium: The amount of money that must be paid for your health insurance policy, for a specified period of cover.
- A fixed benefit: A set amount of money that is payable for a particular extras service or item. Your insurer should be able to tell you up-front what your benefit will be.
- Excess: The amount you must pay towards your same day or overnight hospital treatment. Like the excess you might be required to pay for car insurance. This will vary, depending on what level of cover you have.
- Gaps: Any out-of-pocket expenses you’ll incur, and the difference between the fee charged by a provider and the amount your insurer will pay for the service.