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HEALTH INSURANCE COMPARISON A FIRST FOR AUSTRALIA
In This Inaugural Report We Look At:
- Health insurance comparison a first for Australia
- Which profile best fits you?
- National awards – who came out on top?
- Only pay for what you need
- Beware: Not An Open And Shut Case
- Free health insurance for kids
- How to use the CANNEX health insurance star ratings
Private health insurance is back on the agenda after the Federal Government's May 2008 budget included a proposal to increase the Medicare Levy Surcharge threshold for singles, couples and families. The ensuing debate over whether to stick with private health cover or opt for the ailing public hospital system has served to remind many people to revisit their health coverage or lack of it.
Market watchers have made predictions of anywhere between 400,000 and one million Australians opting out of private hospital cover if and when the legislation comes into effect. Regardless, most consumers will now be re-evaluating what actual benefits they are getting from their private health insurance. At this point, a degree of difficulty kicks in. It’s virtually impossible to clearly compare health fund products because the information on all health funds is simply not available in the one place. There is further confusion over inclusions, exclusions, even medical terms themselves which are not always understood by consumers.
Recognising this ‘gap’, CANNEX has undertaken the most extensive research initiative ever into private health insurance in order to rate private health cover from five-star downwards. We looked at over 1,500 products across three different coverage sectors – hospital, extras and packages. The latter consists of hospital and extras rolled into one, as many of these products are not available as stand-alone products. We drilled down further to differentiate the cover for six different profiles in each state and territory of Australia, making it easier for the consumer to compare apples with apples.
The final scores for each health insurance product reflect a mix of premium price compared against up to 70 features. The calculations are finished and Best Value health insurance funds named for their national and state coverage. These are available on http://www.cannex.com.au/health-insurance/ along with five star health products in all states and all profiles.
Which health insurance profile are you?
Click here to view our simple guide to find out which profile you fall under.
Who Came Out On Top?
We looked at over 12,350 quotes from 1,500-plus products and compared them against six profiles and eight states with the goal of finding the best value products and health funds. Overall, AHM, HBA/Mutual Community, MBF and Medibank Private have been awarded National 5 Star Health Insurers. These funds were much more consistent across the board and while two out of our top four are not shown in the individual categories of cover, they stand out for the broad and deep value offered to consumers. Congratulations to AHM, HBA/Mutual Community, MBF and Medibank Private.
Some health insurance funds did better for specific product lines, states or profiles, depending on their area of focus. This became obvious as we collated the findings of our research. AHM were superior for hospital cover across Australia. MBF, it seems, specializes in Extras by offering very competitive products in this area and NIB excels in packages combining hospital and extras cover. However, these areas of expertise were not necessarily enough to get all funds over the line as offering the best all round value on a national basis.
We applied the same methodology to drill down into private health cover on offer in each state and territory. Once again, each area of cover was looked at and often found to be the domain of one particular fund. However, on an overall basis, the results turned up a different result. The following funds listed provide five-star products, giving consumers an accurate guide to funds offering value for money.
Don't Pay For What You Don't Need
Paying for obstetrics cover when you’re retired makes just about as much sense as a young person paying for a hip replacement. Private health insurance is not a one-size-fits-all, despite the common misconception that you have no say in what is included or excluded in your policy. During CANNEX’s research, we regularly came across the mindset that people thought they only had two choices with health insurance – either buy it or not! The key to saving money is to identify what features are important to you and tailor your cover to suit. It may be that, as a fancy-free young single, you may value the safety net of hospital cover, should you have an accident, and also chiropractic and physio to help ease those sporting aches and pains.
On the other hand, a mature couple with a growing family can afford to dispense with obstetrics and IVF, in favour of orthodontics for the kids and maybe the cardio-thoracic cover they did not think was necessary when they were younger. The bottomline is to look carefully at features you believe are important to you at your stage of life. The other thing to remember is that the needs of you and your family don’t stay the same as the years roll on. It’s wise to revisit your health insurance cover regularly and upgrade or downgrade as necessary in order to get the maximum benefit from the premiums you pay. You certainly don’t want to discover the hard way that you are not covered for a procedure you believed you were.
Beware: Not An Open And Shut Case
Closed funds are not available to the general public. They may be provided exclusively to the members of an organization or those who work for a specific employer. These funds have not been included in our study as the general public cannot join up. Another group of policies excluded are the policies that have been closed to new members. These policies are provided by open funds, have been superseded and are only continued for existing policy holders. If you leave one of these policies, it is a one way street and you will not be able to switch back in. So shop the market for alternatives, but before you move, compare what you will gain and in particular what you will lose. If there is a feature of your policy that you particularly value, make sure you are getting it with the new cover.
Free Health Insurance For Kids?
Free health insurance for kids might seem like one of those deals that are too good to be true but this is no hoax. Private health insurance funds in Australia charge the same premiums for families with children as they do for couples without children which effectively means you can get free private health insurance for your kids. While this might make a few couples without kids a little cranky at the thought of subsidising health insurance for someone else’s children, it means that families with kids are in a much better position to afford private health cover without having to break the bank.
Pennywise parents are always on the lookout for child-friendly discounts which is why offers such as “kids stay and eat for free” deals are so popular during school holidays. Some health funds have decided to take their child-friendly offers even further by waiving the hospital excess if your child is admitted to hospital. There are also offers for no-gap dental services at participating dental clinics. So you ask, is there anything in the fine print you should know about? Well, the technical mumbo-jumbo defines a dependent child as “an unmarried person under the age of 18 years”.
Individual health funds can however extend that age limit for dependent children up to age 25 providing that the child is still a full-time student and remains unmarried. If you’re a couple thinking about having your first child, you should also be aware that a 12-month waiting period usually has to be served before benefits can be claimed on behalf of the child so it’s very important to modify your health insurance cover before you start trying to conceive.
Each health insurance fund has different offers so here are a few questions to ask when
shopping around for hospital and extras cover;
- At what age will my kids no longer be covered by our family policy? Are there any conditions?
- Do I have to pay an excess if my child is admitted to hospital?
- Are there any no-gap extras benefits for kids?
If there is a specific benefit that you value, shop around for it.
How To Use CANNEX Star Ratings
The first-ever star ratings of health insurance by CANNEX was a mammoth effort, way beyond the scope of ordinary consumers. That’s why the report is so important and an immensely valuable resource for those who are serious about comparing health funds and products. We reviewed no less than 1,544 private health insurance products, 753 of those were for hospital cover, 330 for extras cover and 461 were for packaged hospital and extras cover.
In looking up the best cover for you or to check out how your current health fund rates, an added bonus is that you’ll find out a lot more information along the way, thanks to stories, hints and tips, comments and video clips on our
health insurance page.
The first thing to do is check
what profile would best describe you, then go straight to your state of residence and the profile you have chosen. You will then bring up our Five Star Summary of superior products in all three categories of cover - Hospital, Extras and Hospital & Extras Packages. This provides a short list of products to further investigate. Don’t discount four star products, though. It may be that you require features that are necessary for you but are more expensive such as orthodontic, psychology or blood glucose monitoring. These and other expensive features may not necessarily be offered in the five star products but are still offered in plenty of good, fully featured products rated at four stars and below. You just need to know what features are important to you and search them out. Health cover is not a one-size-fits-all but the CANNEX star ratings is as close as you can get to a complete and fair comparison of all products, right down to providing the monthly premium associated with each product.
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