6 questions to ask your health fund
Looking to take out health insurance for the first time, but not sure where to start? Most people are introduced to health insurance in their mid-20s, with many covered by their parent’s policy for most of their life. But now they’ve got a job, they need to get their own cover.
It can be a bit overwhelming at first. You’ve been told health insurance is important, but you’re young and healthy. So why do you need it, and how do you get the cover you need without paying more than you have to?
Well, we’ve done the research for you. We’ve spoken to Ed, one of our frontline customer service representatives at CUA Health Insurance. He talks to young people in their 20s every day who ring looking for the best health insurance for singles.
Ed’s put together a list of the best questions he gets asked by young singles every day. So if you’ve been told you need health insurance and don’t know where to start, don’t worry - Ed’s done the legwork for you.
If you’re with CUA Health Insurance or another health fund – it doesn’t matter. If you ask these questions when you ring a fund to enquire about your first health insurance policy, you should end up with all the information you need to choose the best policy for your needs.
1. Why do I need health insurance?
Start with this question because it will ensure you get a basic introduction to health insurance and what the fund offers. The health fund will explain what you need and why, what options are available, the benefits of each and the cost.
Most people in their 20's who are fit and well haven’t really had to consider the need for health insurance before.
When you’re enjoying life, you don’t want to think about the possibility of something going wrong. But unfortunately sometimes they do, even to young, healthy people like you. If you injure yourself while surfing, skiing or riding a motorbike and need an operation for example, then (depending on your level of cover) your health cover will enable you to choose your own doctor and have your procedure in a private hospital. The alternative is going onto a waiting list in a public hospital.
Private health insurance delivers peace of mind and reassurance at those times in life when – through illness or injury – healthcare and hospital-based treatment is needed.
2. What happens if I don’t take out health insurance?
In Australia, the government encourages people who can afford to have private health insurance to do so by penalising those that don’t.
If you’re earning more than $90,000 annually and don’t have hospital cover for the entire year, then you’ll have to pay 1-1.5% of your taxable income to a Medicare surcharge levy. This is on top of the 1.5% Medicare levy you already pay (that’s as much as 3% of your income on Medicare!).
As your career begins to take off, it can be easy to miss this threshold. One minute you’re earning trainee wages, and the next you’re filling out your tax return and realise you’re about to be slugged with a hefty extra charge.
Also, if you don’t take out health insurance by 1 July after your 31st birthday, then you’ll start to accumulate what’s known as a lifetime health cover loading.
This means if you haven’t taken out and maintained private hospital health insurance from the year you turn 31, you’ll pay a 2% lifetime health cover loading. This is on top of your premium for every year you’re aged over 30, if you decide to take out hospital cover later in life. It can be a significant financial burden that’s easily avoided by getting health insurance in place while you’re in your 20's.
3. Do you offer discounts for under 30s?
Here’s the good news: since new health insurance reforms came into effect from 1 April, health funds can now offer discounts to young people under the age of 30. So seek these out.
Discounts can range from 2% to 10% per year. And if you take out a policy with a discount, then you keep that until you’re 40, when it starts to gradually decrease (think long-term savings).
CUA Health Insurance is offering discounts on hospital health policies of up to 2% for every year a member is under 30, and up to 10% for 18 to 25 year-olds. These discounts aren’t available at all health funds, so it pays to ask.
4. What’s the best policy for me?
Discuss your health needs with your potential new fund and select a policy that’s right for you now. If you’re fit and healthy, you might not need to have the same level of cover that you did under your parent’s policy.
Also, ask if there are any policies designed specifically for younger members. For example, CUA Health Insurance has new Extras covers that provide younger members with lower price points when choosing to buy Extras cover for the first time.
It’s easy to compare policies, so have a look around to find a policy that suits your needs and budget. For example, you might decide you don’t need Extras cover right now and that’s OK – you can always add these to your policy if they’re needed later.
Remember, if you switch funds - including moving from your parents’ fund to your own – you might not need to incur a waiting period before you start claiming on your policy. Check this with the fund.
5. How can I reduce my premiums?
There might also be opportunities to access other discounts by using preferred payment arrangements or bundling other products (like financial services) with your health insurance.
For example, CUA Health Insurance offers a 4% discount if you pay your premiums via direct debit from a CUA transaction account.
6. What happens if I need to go to hospital?
Ed says if you think you might need to have surgery in the near future (maybe to remove a wisdom tooth or remove a plate from an earlier sporting injury), ask about this up front.
If you need to go to hospital, you might still have some expenses to pay, particularly if there’s a gap between what your health fund can pay and what the surgeon or specialist charges. These are known as out-of-pocket costs.
It’s a good idea to consider these needs up front, particularly if you may need surgery in the future. It might influence what health policy you choose to go with from the start.
One important piece of advice is to always call your health fund before any procedure. That way, you’ll have a clear idea of what you’re covered for, and what out-of-pocket expenses you might be up for.
Some funds, like CUA Health Insurance, have a ‘find-a-doctor’ service. This allows you to find doctors who provide a no-gap or known-gap services, which can help keep your costs down.
If you’re ready to explore your private health insurance options and learn more, then contact our friendly CUA Health Insurance specialists to discuss your needs further. They’re available Mon – Fri: 8.00am – 5:00pm (AEST) on 1300 499 260.
