How to make the most of your health cover
SMH's Harriet Alexander's hot tips to save you money and optimise your private health insurance in 2016.
PT1M22S 620 349Every year people rail against the private health insurance companies for hiking up premiums, usually way above the inflation rate.
Not me. Couldn't care less.
Private insurance doesn't cover the full cost of "extras", including dental work.
I don't have private health insurance. Never have. Can't see the point.
Not only do I think I'm better off financially, I'm also putting my money where my mouth is - in support of a universal public health service.
Ian McCauley, a research fellow at the Centre for Policy Development, has done some modelling on whether you're better off insuring or not.
Think you're covered? Choice is urging consumers to check again. Photo: Supplied
He told me that if a reasonably healthy person at 25 wisely invested the equivalent of their insurance premium every month to cover medical expenses, they'd have about $80,000 left over at death in their 80s to pay for a very decent wake.
I, too, reckon I'm better off without forking out thousands for a policy I don't really need. And my family has had some health emergencies in our time.
Last year my partner was diagnosed with cancer. She is now recovering after having had the most dedicated support from nurses, doctors and other professionals in the public health system. We have been out of pocket for some things, sure, but many of those expenses aren't covered by most health insurance, anyway. The bulk of our expense was covered by Medicare.
We found there is no difference in the quality of care she received. We know this first hand - my partner shared a public ward with private patients.
For other incidents - broken bones, childhood illnesses - and ongoing visits to the GP, Medicare covers us via payments we make through the taxation system. (We only go to bulk-billing doctors.)
We have never felt like we were a low priority - whether on the cancer ward or when my son broke his leg. We have nothing but appreciation and praise for the dedicated healthcare workers in our public hospitals. They truly are heroes.
One of my sons has braces at the moment. We've paid for that out of our pocket, but the payments are spread out over a couple of years and are manageable at $280 a month.
Private insurance doesn't cover the full cost of what they call these "extras", anyway.
A quick look at Medibank's insurance for "Top Extras" (up to $45.51 a week for a family with hospital cover from April 1) shows they only pay $1000 a year for orthodontics, with a lifetime limit of $3000 per person. So that's $2366.52 a year in premiums for ancillary health cover with only a $1000 for braces.
I think I'll pass. Have they actually checked how much braces cost? It's closer to $10,000.
Given all the caps, limits and thresholds, it really shouldn't be called insurance.
The whole idea of insurance is that you cap your expenses by paying a premium and the insurance company carries the burden of open-ended risk. Don't feel sorry for them, they employ batteries of actuaries to make sure they make a tidy profit.
If you have top-shelf comprehensive car insurance and through no fault of your own your vehicle gets totalled, you'd expect your policy to cover the cost of a new car.
But health insurance? It's the insurance companies that cap their exposure while you still carry the open-ended risk.
Some people take out health 'insurance' just to avoid paying a tax levy. And the insurance companies know this. NIB's website asks "What can we help you with?" and one of the options is "Cover to avoid tax".
Seriously? Why would anyone prefer their money sitting with an insurance company rather than going into the collective pot to pay for roads, schools and hospitals?
While many of us focus on whether or not to continue paying a premium for a pretty poor product, we actually need to look at the policy implications.
What is our health system for? The argument that public patients are a "burden" on the health system is just muddle-headed. It seems our policy pundits and political parties are all in favour of our public health system - until somebody has the temerity to use it.
This is a false moral appeal, says McAuley. "It is an attempt to redefine our public health system as one for the also-rans, the poor and indigent in our society."
The whole public health system should actually be seen as a universal public good, not part of a welfare system.
Sure, if you can afford to pay more you should - but that's what we have a taxation system for. Making that more equitable should be the real focus of tax reform.
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