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Like any aspect of life that’s complicated, health insurance is an area that’s shrouded in myths and misconceptions. Since some of those misconceptions could be costing you money, we at healthslips.com.au – your health insurance experts – are here to sort fact from fiction.
To help you get health insurance savvy, here are some of the biggest myths about health cover, debunked.
Image credit: Shutterstock
Myth: you don’t really need health insurance
The point of health insurance is that it’s only useful if you get it before you need it, and there’s no way of knowing when that will be. Health insurance is subject to waiting periods, which means you can’t claim on your policy right away – which is why it’s recommended you start cover before you have costly health issues.
Myth: you should get lots of money back from health insurance
Health insurance is a form of insurance, which means it’s there to support your healthcare if and when you need it. That doesn’t mean that you’ll get a dollar (or more) back for every dollar you pay for your policy. Just like with your house insurance policy, a lot of the time you might not make any claims. Any form of insurance is an investment against the possibility of future problems that could otherwise cost you a lot of money.
With that said, it’s important to make sure you are getting good value for money on your health insurance policy. If you’re spending lots of money on healthcare services but not able to claim much back, you could be on an unsuitable policy for your needs. We recommend you examine your health needs, both now and in the near future, and choose a policy that better supports your health needs and budget.
Of course, part of that means getting the best price for the best policy, so we recommend you try the healthslips.com.au calculator to compare prices for your chosen level of cover. There can be a massive variation between policies.
Myth: you don’t need health insurance until your senior years
If you’re blessed with good health and fitness, you might not consider health insurance a priority. Perhaps you think it can wait until you’re older, when you’re statistically more likely to have health challenges. There are 2 main problems with this way of thinking:
The later you wait to start a policy, the more it will cost
The government encourages people to take out Hospital Cover earlier in life through the Age-based Discount, which means subsidised premiums if you start cover before 30 and maintain it. At the same time, it also penalises people who start Hospital Cover after 31, by adding the Lifetime Health Cover Loading of 2% per year for every year after you’re 30 when you took out cover for the first time. This Loading stays in place for 10 years, and the older you are when you start, the higher your Loading (up to a maximum of 70%).
You don’t know what will happen
Even young, fit and healthy people can face unexpected health challenges that could require hospital treatment, and if that involves a procedure with a long waiting list, your life could be effectively on hold while you wait for treatment. But if you have Hospital Cover, you can go to a private hospital more quickly, choose your doctor and perhaps (if it’s available) get your own hospital room, and get your life back on track faster. So if something unexpected happens to you health-wise, that health insurance policy could really pay off.
healthslips.com.au does not provide general or personalised advice. Your particular circumstances are likely to impact the accuracy, completeness and relevance of the information or results. Take this into account before making a decision and talk to an expert for financial advice.
Trudie McConnochie
Writer and Researcher
Knowledge is power – that’s the guiding principle behind everything Trudie writes, and it’s a philosophy she brings to her work at healthslips.com.au. By breaking down complex information into easy-to-understand blogs and stories, she aims to empower Australians to make the best choices and an informed decision around private health insurance.
Trudie understands firsthand some of the complexity of private health insurance having moved to Australia from New Zealand and having to navigate a vastly different public healthcare system and health insurance structure.
Trudie holds a Bachelor of Communication Studies (journalism major) from the Auckland University of Technology.
