Become a Creator today!Start creating today - Share your story with the world!
Start for free
00:00:00
00:00:01
012: Comparing private health insurance
524 Plays6 years ago
Mia and Dinah talk about principles for efficient comparison shopping and fast decision making, before getting into the process and tools specific to reviewing private health insurance.
To avoid spending days researching better deals and ending up with analysis paralysis, there are several principles to embrace when comparing products or services:
- Keep the end in mind – Make sure you know what you are aiming to achieve – saving money, finding better quality products or services – before you start comparing. Decide how long you are willing to dedicate to the research stage, and for what benefit.
- Satisfice more and maximise less – Establish standards for what is good enough and accept and embrace them rather than being resigned to it.
- Use rules of thumb to reduce effort – Decide what criteria you will use to compare providers, and how many providers to compare.
In respect to health insurance, Mia and Dinah give an overview of what Medicare covers versus insurance, explain industry jargon and outline and things to consider when comparing different types of cover, such as:
- Medicare Levy Surcharge
- Health Insurance Rebates
- Lifetime Health Cover Loading
- Difference between Hospital and Extras cover
- Excess
- Waiting periods
- Limits and benefits
- Comparison sites
They each talk about their own process for comparing private health insurance and Mia’s satisfaction when she dedicated an hour and a half to the task to save $100/month with higher annual benefits on the services that are important to her.
How to compare private health insurance:
- First, look at your current financial situation and cover to understand your premium, what rebate level applies to you, your benefit limits and claims history
- Decide what type of treatment, customer service and price saving is important to you before you even start to compare and agree how much time you are willing to dedicate to the process
- Pick how many providers and cover types you are going to compare
- Jump online to familiarise yourself with each provider’s products, then call up each of them and switch when you find a better deal.
RESOURCES
Privatehealth.gov.au – government website that explains private health insurance and provides a comprehensive cover comparison tool
Members Own Health Funds – comparison site with cover from 16 Australian not-for-profit and mutual health funds
PHI Extras Calculator – a Google Drive spreadsheet, built by Life Admin Life Hacks, which helps you compare extras cover
SHARE
Please head to the Life Admin Life Hacks Facebook page to connect with listeners and share your thoughts, questions or suggestions.
Recommended
Transcript
Selling a Car and Financial Planning
00:00:00
Speaker
Hey babe, what you got there? This is a check from Carvana. I just sold my car to them. I went online and Carvana gave me an offer right away. Then they just picked up the car and gave me this. Well, that's a big check. Well, obviously you could put this towards your next car, or we could finally get that jacuzzi, or I could start taking tuba lessons, or I could quit my job and write my memoir. Or I can put it towards my next car with Carvana. Sorry, your check, not mine. Sell your car to Carvana. Visit Carvana.com or download the app to get a real offer in seconds.
Introduction to Life Admin Life Hacks Podcast
00:00:30
Speaker
This is Life Admin Life Hacks, a podcast that gives you techniques, tips and tools to tackle your life admin more efficiently, to save your time, your money and improve your household harmony. I'm Dinah Roe Roberts, a commercial and finance executive. And I'm Mia Northrop, a user experience designer, researcher and writer. Is it worth it? Why is it so expensive? It's so hard to understand.
00:00:57
Speaker
I tried to change but I got so confused I gave up. Yep, this app will be talking about private health insurance. Hello and welcome to Life Admin Life Hacks. We're going to focus on admin to do with financial products this year.
00:01:14
Speaker
It's an area where people feel like they could be getting better deals and are hungry for peace of mind. So today we'll cover principles for efficient comparison shopping and fast decision making and processes and tools, particular for reviewing private health insurance.
Financial Decision-Making and Prioritization
00:01:30
Speaker
So in terms of decision making, I think what people get quite overwhelmed by when they think about
00:01:38
Speaker
private health insurance or home loans or internet plans is the huge amount of choice and how much time it might take to actually find a product that is right for you. So step one is to do a kind of cost benefit analysis. Think of, say, for example,
00:01:56
Speaker
health insurance, how much time do you actually want to spend working on this? How much energy are you going to put onto it? And what kind of financial benefit is going to make it worthwhile for you? So you have to think about why this decision is actually important. Are you worried that you are spending too much money on this product? Are you worried that it's taking too much time to manage it? Are you just unsure of whether you're getting the right deal or whether you have cover, for example, why are you actually making this decision?
00:02:27
Speaker
And think about how much time you want to dedicate to it. What's the effort savings pay off you? Are you going to spend an hour? And as long as you're getting a better deal than what you currently have, you'll be happy? Or are you going to say, I'm going to spend two days on this and I want to save at least 500 bucks because I need to make up my budget somehow. So think about it in terms of how long you're willing to spend on doing it.
00:02:49
Speaker
And what kind of financial payoff is going to make it worthwhile? And so it can be very easy to get into this kind of decision paralysis because you're trying to get the absolute best deal. And so one of the principles you really need to follow is to kind of satisfy some more and maximise less. So accept the fact that what's going to be good enough. So what sort of saving will be sufficient for you to have made a decision?
00:03:13
Speaker
and embrace and appreciate this rather than be resigned to it. So don't keep looking for the better deal. Don't get sucked into looking at the next ad and thinking, oh, I should change again or compare with others. Just establish the standards about what's good enough for you when you're making your decision and stick to it. And finally, think about the rules of family going to follow to reduce your effort.
Private Health Insurance in Australia
00:03:38
Speaker
You can say, you know what, I'm going to compare
00:03:40
Speaker
to my current provider to two others. I'm looking at three all up and that I'll be happy with that. Or you might decide I'm going to use the rules of thumb that Choice Magazine or Canstar Blue says in terms of what criteria I should be using to compare the different providers. And if they say that I should be caring about these five things, then they're the kinds of things that I'm going to be looking at.
00:04:08
Speaker
Now, before we dig into our private health insurance in detail, for our overseas listeners, there's going to be some relevant content in this EPP in terms of principles, but it is quite specific to the legislative environment and health system here in Australia. We've decided to do a deep dive into private health insurance for a couple of reasons. The survey that we ran last year amongst our listeners showed that 60% of you think you're probably wasting money on insurance.
00:04:37
Speaker
And I think importantly, private health insurance is a great time to be shopping around at the moment because there's lots of specials and deals around because the annual premium increase is just around the corner on the 1st of April. So yeah, you're going to see the ads and you're going to get that letter in the mail that says, we are increasing your premiums by X percent. That happens every year. We've also both worked in PHI.
00:05:02
Speaker
And so we've learned quite a bit about it. And I know for me, when I worked there, Mike, I had all these light bulb moments because I realised I had totally misinterpreted or was quite ignorant about how it actually works. And I think finally it's forced Mia to go through the process of changing her health insurance, which is something we've actually been talking about since we even first started this podcast that she really needed to get on with it.
Understanding Health Insurance Components
00:05:28
Speaker
Yeah. The journey's been fun.
00:05:32
Speaker
So we actually have an incredible health system in Australia. We can pause and take a moment compared to other countries. We're very fortunate to have affordable medical care. So in Australia, under Medicare, residents can be treated in a public hospital at no charge by a doctor appointed by the hospital. And this will include your consultations, any surgery you might need, any tests you might need, X-rays, that kind of thing. But private health insurance has two components.
00:06:00
Speaker
The first is private hospital cover and the second is general treatment, which is also known as extras or ancillaries. The private hospital cover means that you can be admitted to a private hospital and then you can choose, we can choose which hospital you want to go to and we might be able to choose the specialist as well. The general treatment or extras includes things like dental examinations and treatment, physiotherapy, occupational therapy, speech therapy,
00:06:30
Speaker
You could have chiropractic, psychology. You can go to the optometristic glasses and contact lenses. You might have remedial massage or myotherapy or glasses. So the word extras kind of feels like a misnomer because a lot of those treatments and therapies make up the majority of health health that people get each year. You don't often go to the hospital, but you might get a massage or get new glasses or be the dentist, hopefully going there twice a year.
00:07:00
Speaker
So these therapies or treatments are extra or ancillary in relation to the care your GP or your primary physician might provide, but it's kind of a doctor centric view of healthcare because really extras is what most people are using most of the time.
Government Policies and Incentives for PHI
00:07:18
Speaker
So there are three parts of private health insurance kind of carrots and sticks that the government has enforced to try and make more people take out private health insurance. And before you start to compare, you really know to know which ones apply to your situation. So the first one is that Medicare levy surcharge. So that's kind of the tax that you pay if you don't have private hospital cover.
00:07:44
Speaker
So if you earn over $90,000 for singles or $180,000 for a family and you don't have private hospital cover, you have to pay the Medicare Levy surcharge, which is one and a half percent of your income. This is kind of the big stick to make people take out private hospital cover.
00:08:03
Speaker
It is worth noting that hospital cover is pretty expensive. So in some cases, it could still be cheaper to just pay the tax. So you might actually make a deliberate decision to pay the 1.5% tax rather than bother taking out private hospital cover if you don't think that it's valuable to you.
00:08:22
Speaker
It's also worth noting, I think this is something where lots of people get confused, is that you only need to have hospital cover to avoid that tax. So you don't need to have extras. So if you decide that you just want to avoid the tax and just take out hospital cover, you don't need to think about extras at all. Then there's the lifetime health cover. This kicks in if you're 30 or older and you haven't taken out private health insurance. If you're under 30, don't have to worry about it.
00:08:52
Speaker
If you've always had private health insurance since you turned 30, you don't have to worry about it. But if you're over 30 and you decide to take it out for the first time, you're going to pay a rate of 2% for every year over 30 that you haven't had health insurance. So they try to incentivize you to get the insurance as soon as you turn 30, because the longer you wait, the more your premiums are going to be. It's a penalty for not getting into this.
00:09:22
Speaker
sooner. And I think it's worth reminding listeners too that that also only applies to hospital cover. They can take extras at 65, having never had them before and you won't pay any different price. So it's really about making sure that you take out hospital cover before you turn 30. And all of this is designed to put less pressure on the public hospital system.
00:09:48
Speaker
They're basically saying, if you can afford it, we really want you to use private hospitals because we've got a lot of people to serve through our public hospitals who don't have the choice of going private because of finances. And then the final thing to understand is what's known as the health insurance rebate. And this applies to both hospital cover and to extras cover. But again, it really depends on how much you earn. So it's an incentive
00:10:17
Speaker
that the government will contribute to your premiums if you earn less than $140,000 for singles and less than $280,000 for families.
Insurance Premium Calculations and Variations
00:10:27
Speaker
So it's a sliding scale. It's a little bit complicated in terms of understanding which rebate will apply to you. But you can look up what's the level of rebate you'll get. And then the government will contribute between 8% to 33% of your premium, depending on how much you earn. When I started working in PHI,
00:10:47
Speaker
private health insurance as it's known to most in the industry. I had a few light bulb moments where you start questioning whether you're a functioning adult. There were some things that seemed to be quite basic that I had not realized. One of them was that I didn't really understand that private health insurance wasn't risk-rated. I had
00:11:11
Speaker
health insurance, life insurance, trauma, income protection, all of that was just insurance that I figured there were questionnaires to fill out and medical exams to have. But no, to get private health insurance, all they need to know is your age and your state and your household income. And then I can give you a quote. There's no medical history. There's no examinations or questionnaires required. And the whole industry works on this idea that people are going to share the risk
00:11:41
Speaker
So we're all paying the same premium if we're the same age, living in the same place with that certain income tier, regardless of how sick we are. And that is kind of why it's so expensive. Yeah. And the only reason they actually ask you your age is to figure out the rebate rather than worrying about the actual premium. And so I think a lot of people think because they ask you your age that older people pay higher premiums is just not the case.
00:12:10
Speaker
So everyone pays the same. Yeah, right. And why do they ask the state then? What has that got to do with anything? So everyone pays the same within their own state.
00:12:21
Speaker
So the insurers can charge different premiums in different states. And so that means that the states that have the older populations tend to have higher premiums than the states that have younger populations. And it's also reflective of the cost of providing care in different states. So some states have much cheaper private hospitals than other states.
00:12:44
Speaker
Should we all be moving to Queensland if we want to? Yeah, I think so. I think Northern Territory might actually be the cheapest place to live to have private health insurance, although I haven't looked for a long time. Another thing that often gets talked about is waiting periods. So waiting periods are for people who are new to cover or new to a particular benefit. So, for example, if you've never been covered for major dental before, there's usually a waiting period associated with getting those benefits.
00:13:12
Speaker
But if you've been previously covered for major dental and you just want to switch to another insurer, that waiting period, once you've served it, you don't have to serve it again. So if you've had benefits of $600 a year for major dental with one insurer, that waiting period's been served and you can move to another insurer with the same level of benefit without having to serve the waiting period again. Another aspect to think about is how the excess works.
Managing Insurance Costs and Coverage Options
00:13:39
Speaker
And an excess is simply you agreeing to pay the first chunk of a hospital admission bill, and this will bring down your annual premium. So often they'll suggest an excess of $250 up to $750, and you'll pay that if you're admitted. And it might mean that this brings down your premium from $5,000 to $3,500 for the year.
00:14:05
Speaker
So this is useful for people who have no planned admissions and are unlikely to use hospital services. You might decide to pay an excess because it's going to bring down the premium overall. Some policies actually have a no excess for kids. So if kids go to hospital, they'll cover the whole hospital admission bill and they might have no excess for same day admissions. This kicks in if you have a procedure that's in day surgery. For example, I had my wisdom teeth out as a medical procedure.
00:14:34
Speaker
Maintained in the morning, they yanked my teeth out, stayed there for recovery for a couple of hours and then I went home and they covered the whole hospital cost for that.
00:14:46
Speaker
When you're looking at extras, one of the things you need to look at is the annual limits. So how much you can claim over a year. So it's worth understanding that most insurers have those allowances over a calendar year. On the 31st of December, your new allowance will kick in from the 1st of January.
00:15:07
Speaker
And in some cases, insurers bundle similar things together. So although you think you've got a $600 limit for physio, it might also include massage and osteo. So if you use up your allowance on osteo and massage, then you'll have nothing less for physio. And in some cases, those annual limits or allowances will be across your whole policy. So include every member of your family. And in some cases, they're only
00:15:36
Speaker
about you individually. Some terminology that you hear all the time is no-gap dental. Sometimes it relates to other x-rays, but it's often no-gap dental. This is great because it means if you go to a specific provider, there's no out-of-pocket costs. You go in if you're in your checkup and clean and you walk away and you swipe your high-caps card into painting.
00:16:01
Speaker
It's worth checking though if this is only with approved or specified health providers or whether you have to go to a dental centre associated with the fund itself. There might be limited choice, so you need to check if this is actually convenient for you and whether you can actually take up the no gap dental offer.
00:16:20
Speaker
Another thing to be mindful of is that you need to make sure that if you're not claiming straight away using a terminal or a high caps machine at a various clinic and you've got paper claims you need to submit, make sure you get them in quickly because depending on the insurer, you need to claim within say one to two years of the service. So it's a real incentive to make sure you keep on top of that admin.
00:16:43
Speaker
Also good to know that you can call your insurer with the item numbers of any proposed procedures or treatments that are being recommended for you, and they'll tell you what benefit they'll pay towards it. So if you are thinking, okay, my dentist is suggesting I get some kind of root canal crown thing, and they've given you a piece of paper with the procedures and the item numbers, you can ring up and say, this is what they suggested. They've told me it's going to cost three grand. What will I get back from you?
00:17:13
Speaker
This way you get a better picture of what your out-of-pocket costs might be, what the gap might be. Yeah. And when you're comparing products, particularly for extras, it's really important to think about what's important to you in terms of how much you get back, because there's two really different types of products.
Simplifying Insurance Choices and Comparisons
00:17:32
Speaker
There's those where you get a percentage back, so like 50% back, so you know that you'll get
00:17:37
Speaker
you go to the dentist and it costs $200, you'll get $100 back. And there's others where they call set benefits. And that means that if you go to the dentist for a checkup, they'll pay a fixed amount, like say $50. So if you know that your dentist is reasonably cheap, the set benefits are usually much better for you. But if you know that you go to a more expensive dentist or expensive physio, then you're usually better off going for the percentage back policies because you get more back per visit.
00:18:08
Speaker
You need to dump pregnancy cover if you are done with having kids. This is a really expensive component of hospital cover, obstetrics, assisted reproductive technology, IVF, all of that. So if you know that you are not going to have any more children, you are not going to be needing the services of an obstetrician, you should downgrade your level of cover because you don't want to be paying extra for something that you are not going to be using.
00:18:34
Speaker
There are also some costs that you can claim both through Medicare and private health insurance, like the surgeon's fees if you do have a hospital admission. And also with extras, sometimes a Medicare benefit might apply. So for example, if you get Medicare funded treatment to see a psychologist, and then once that's exhausted, you can claim through your extras in your PHI policy.
00:19:00
Speaker
So in Australia, there are about 30 insurers and there are literally thousands of products offered. And even for us, you know, the two of us, we've worked in this industry. When you start to look at the different policy types and coverage types, it is confusing. It feels complex and it feels endless. And this area is a great example of where having too many choices actually just freak you out and prevent you from switching. It's when you have to be really disciplined about
00:19:31
Speaker
thinking, okay, I'm going to be a satisficer. I'm not going to be a maximizer because I'm not going to spend the next month comprehensively researching every insurer or product in the marketplace. I very much went with the process of if I'm getting a better deal than I am now, I will be happy.
00:19:50
Speaker
Yeah. When you look at health insurance online, which is usually the first way people start to research, they usually ask you a few questions and then
00:20:01
Speaker
will offer up three different product options, usually like a, you know, a bronze or silver and a gold kind of idea. But you most insurers have more products than that. So sometimes it does really benefit to phone them up rather than to look online because then you can ask specific questions if there's particular things you're looking for cover for. There are also comparison websites like iSelect and Compare the Market and they offer
00:20:31
Speaker
tools to compare policies from different insurers, which is useful. But you need to keep in mind that they don't represent all the insurers in the market and they don't even represent all of the products from those insurers. They're very much incentivized by their clients, the customers, who are the insurance companies to promote certain products. So they'll only ever show you a subset. It can be useful to use those tools to get a feel for what's out there, but keep in mind that you're not seeing everything.
00:21:01
Speaker
The government website, privatehealth.gov.au is comprehensive. It does include all the insurers. So if you want to compare the whole market, we want to see everyone that's out there head along. It's actually got some great information on that website too about how it works and what's included in PHI versus Medicare.
00:21:21
Speaker
But I think I could definitely use some of your UX assistance mare to make that website easier to use. Oh, it's a hard nut to crack. Definitely. I look at that site and I feel sorry for the designers because it's very hard to compare. Well, you're trying to compare apples and oranges. They're trying to make it all apples with the changes in regulation where they're going to change how things are named, those product information statements.
00:21:48
Speaker
where they're having everyone present the information in the same way. They're trying to help people compare or getting there. Okay, so Mia, you've recently gone through this process. Let's start with thinking a little bit about your experiences. Yeah, so I guess I had always been on my parents' health cover plan when I was in my 20s. And then I think when you hit 25, you can't be on your family plan anymore. And I would have had
00:22:17
Speaker
individual, an individual plan. Both my husband and I had that. Definitely had it by the time lifetime loading was introduced. So we had individual policies and we went to a couple policy when we started living together and really we just wanted to be covered for ambulance and dental, any accidents and emergency kind of stuff. Then when we got married and started thinking about having kids, we upgraded to have
00:22:43
Speaker
hospital cover that would deal with having babies, obstetricians, gynecology. We prefer to policy with no hospital access for the kids or same day admissions to cover minor procedures and accidents. And now the focus for us is pretty much on extras. Dental is important. The kids go twice a year. My husband goes frequently. Chiropractic and myotherapy. I go motherly for that for my wonky back.
00:23:11
Speaker
We've used hypology, we've used optical. We've wanted to downgrade our hospital cover, but be far, far extra cover. I had noticed that we had really high out-of-pocket costs with dental. I would go and claim
00:23:27
Speaker
And the receptionist would always be like, oh, I think if you were with ex, you'd probably get more back on this. They always have little comments about what your fund is giving and what your gap is. But I just noticed that, you know, my kids are actually only covered for one dental visit per year. And the recommendation is that you go twice a year.
00:23:45
Speaker
And I also knew that when I got to the end of the year, I would often hit my limits for my own therapy and chiropractic. So I was having to pay the full cost or I would just have to stop my appointments and wait until January for it all to refresh. I've had two hospitalizations in the last five years, one in the private system.
00:24:06
Speaker
Let's just say dance floors and drinking in high heels in me don't mix. And then while in the public system where I had a very random thing happen, I just had to go off in the middle of the night. But I was very glad to have private health insurance because it did mean the rehab, the ambulance from a country wedding was all covered because I saw the bill for that. That was thousands of dollars in itself. So my PHI paid for itself in that
00:24:35
Speaker
very memorable ambulance ride. But we've got no chronic illnesses to deal with. Touchwood, we're beyond pregnancy in the birth stage. So lower hospitals, definitely a priority. The last time I changed was in 2012 after the birth of my daughter. And that's when I was working in insurance and discovered how it really worked. But I didn't change. And then after the birth of my son, I did downgrade. But I haven't changed insurance for a really long time.
00:25:05
Speaker
So it was high time to get onto this. So why do you think, Mia, that it took you so long? I mean, you actually do know a bit about this. What was kind of holding you back from doing the work? It wasn't like I'd had any negative experiences with my insurer. Apart from bumping into the limits and thinking, oh, I could probably get a better deal. It wasn't like I had any huge drive. I was, I think I was in set and forget mode. Yeah. It was one of those things on my to-do list, but I,
00:25:32
Speaker
I don't know. I think when I stopped and thought when was the last time that I actually compared? So 2014, I was like, OK, well, it's not it's a long time, but it's not ridiculously long. And maybe I wasn't confident that I'd get a much better deal. But I'm glad that I have gone through this because I have got an incredibly superior deal. It's interesting. And I think one of the things that I noticed when I worked for a private health insurer
00:25:59
Speaker
was that the people tended to fall into two buckets. And if the people who checked very regularly, so maybe every year or every second year, and then a large number of people who are in that set and forget kind of category, unless it, you know, if it ain't broke, don't fix it kind of thing. And I do think that,
00:26:20
Speaker
You know, it's interesting what triggers you to actually think, actually, I really should do this because it's a lot of money. Like private health insurance is one of the biggest expenditure items. So it's definitely one that is worth putting at the top of the list rather than at the bottom of the list. Yeah. I guess if our health needs had changed in a major way in the last few years, I would have, I would have changed sooner. So you changed quite recently.
00:26:48
Speaker
Yeah, it was the last time you changed. What triggered that? The main thing that triggered it for me was I stopped working for a few months and was trying to decide what I was going to do with my career. And so for us as a family, money became much more important in terms of thinking about how much we were spending on things. And so given it was such a big expenditure item.
00:27:07
Speaker
It was really motivated me to do the work and do it hard to make sure that I got the absolute best deal. So, Mia, when you said you were going to do this work, I gave you a list of things to do, a process to follow. So let's talk about how it went. Yeah. So what was step one? Step one was I went to my current fund website to just check what kind of cover type I had and what my premium was.
00:27:35
Speaker
Because, and I tell you why I chuckle there, is because on the website, the premium that is listed there didn't take into account my rebate. And what I pay, what actually is on my credit card statement is actually a different number. So I had to look at the number that comes out of my actual credit card, the premium, with or without the rebate.
00:28:00
Speaker
I then looked at my claims over the last 12 months. So I was able to go into my account section and look at all my claims and identify where no benefits are paid. I just scanned it and sometimes I'd have a treatment and the contribution would be zero. And then it also showed me where I hit my limits so I could see where I was wanting to get more value.
00:28:26
Speaker
Then I added up all the benefits that my insurer had paid out over that year and compared it to the premium I'd paid. I was actually amazed to see that I had received more than I'd paid over the year, which was a huge positive because I think
00:28:43
Speaker
That doesn't even take into account if there had been hospital admission, but I'd actually been getting more benefits than I'd paid. Then I identified the hospital procedures and extra services that I really cared about or thought we'd be using in the next two to three years. I took note of my current limit for those extras. I know that hip replacements and dialysis and podiatry, we don't need any of that stuff. What I really cared about was chiropractic, myotherapy, the dental,
00:29:12
Speaker
And I noted what my limits were for those. And then I decided I was going to call three. I was going to call my current fund, give them a go, give them a chance to keep me. And then I was going to call two others. So how did you decide which two others you were going to call? So I do listen to the receptionist at the dental centre. She always said that I think if you were with Boopa, you'd be getting more on this. And so I'm like, Boopa's a big,
00:29:41
Speaker
well-known international insurer. I see them advertising all the time. I know they are a for-profit insurer, but I'll be happy to give them a go. Then you suggested Members Own, which is an aggregator for 19 insurers that are all not-for-profit. This is a firm that
00:30:01
Speaker
looks at 19 insurers, including restricted funds, that are only available for certain industries. So I decided that my current fund, which is HCF, they're a not-for-profit, member zone and blooper. And I started by just calling HCF.
00:30:18
Speaker
and having a chat with them was a very short chat because I was on an old product that I didn't even offer to new customers anymore. I was actually already on the highest cover for extras. So there was no product that I could get that was going to give me more for my Cairo or dental. And if I change hospital cover, it was actually going to cost more, but I would get less coverage. So they couldn't actually offer me a better deal, which was astounding.
00:30:49
Speaker
Then I called Member Zone. Before I went to the website, just to get a feel for what they called things and who their insurers were, I had a great chat there. It was great customer service, asked me a few questions. And what was enlightening was the customer service person talking me through risk and industry funds. So these are things like funds that
00:31:12
Speaker
for the defence force and for education sector and emergency services and I always assumed that you had to work for them like now or in the recent past or your partner had to work for them to be eligible. But no, it is quite an extended family network that you can draw from to be eligible for these funds. So I'm talking grandparents, siblings, cousins, my partners,
00:31:42
Speaker
siblings, partners. It was just, I was like, okay. And she basically read through this list and it's like, do you or anyone in your family, have you ever worked for the defense force? And I said, well, my granddad served in World War II. Does that count? She's like, yes, it does. I'm like, okay. Similarly, the education fund. My mum was a primary school teacher in the eighties. That counted.
00:32:10
Speaker
There was one for the railway and transport because my husband's grandfather used to be a train driver. So there was our inn. And I was really glad that I didn't sheen out to all those family stories that I have heard over the years because it came in handy because we actually ended up going with this railway transport fund that I'd never heard of because it was really competitive.
00:32:34
Speaker
So it was great to talk to MemberZone because I could access a much larger range of policies. I did actually also do a quote with Booper. So when I was online with members on the phone with MemberZone, I was actually online on Booper at the same time doing a quote and getting a comparison and they just, their policies weren't competing. So I was happy to go to with MemberZone. He switched me over there and then I provided my details and it was all over an hour.
00:33:00
Speaker
So the whole exercise took about was less than an hour and a half, including going to my current website, downloading the stuff, checking what my limits were, and then getting onto the phone or the websites of these three competitors.
00:33:14
Speaker
I do think it's interesting that you do usually need to get onto the telephone with private health insurance, because I am one of those people who would really rather not speak to humans when it comes to admin. I really love doing everything online in my own time. It's really convenient. But I do think this is probably one of those exceptions to the rule where it's actually worth picking up the phone. And it usually means that the process is quicker than trying to do it yourself online. And what is useful is that
00:33:45
Speaker
So the sales rep, they have access to comprehensive databases of all the other insurers' policies. So she was able to actually bring up my HCF policy, even though it was a legacy old product, and compare line for line what that policy gave me versus what she was suggesting. So that access to that information just gives you peace of mind that they're doing that comparison work for you.
00:34:15
Speaker
So you did a comprehensive check of your policies last year. You built that spreadsheet, which we're going to share a version of this spreadsheet actually as a tool on the website. Diana did some Excel magic, which helped pull together some of those stats really simply. And you did it in June, so you could take advantage of end of financial year.
00:34:36
Speaker
Is that right? Yeah. And as I was saying before, money was really the sort of big motivator for me. And I was willing, because I wasn't working, I was willing to dedicate more time to it. And so I did a really comprehensive check of policies. I think I actually spent a whole day on the exercise, both in terms of first understanding
00:34:57
Speaker
what we had claimed and what we were likely to claim and then looking at various policies. And so I actually went to the full extreme and actually ended up splitting my hospital cover with one insurer where I could get a much better deal on my hospital.
00:35:12
Speaker
and putting the extras policy with a different insurer. So I probably wouldn't bother doing that now because obviously I'm back at work and so money is not as important. You know, you can spend more time, but I would say that probably the additional hour, probably, you know, hours of the day save me maybe an extra $50 a month. So you've kind of got to just decide whether that's worth it for you. At the end of my exercise, I'm saving $100 a month on my premium, which I think is amazing.
00:35:40
Speaker
It's a huge deal over 12 months and the limits for my chiropractic and dental and massage or my therapy are way more generous than what I was getting previously. So I'm paying less and I'm getting more. And I tell you what, at the end of that phone call, I felt so freaking awesome.
00:35:59
Speaker
Yes, it's great. I was on a massive high. I was like, that was so worth it. I felt great. Yeah, so definitely worth it when you haven't changed for a while, too, because you usually can get a much better deal. So, Mia, what advice would you give to one of our listeners who's looking to change their health insurer? OK, so first of all, we have to decide which carrots and sticks apply to you. Which of those three government initiatives do you need to worry about?
00:36:28
Speaker
Secondly, I'd say, I guess, don't feel pressured into getting extras. For a lot of people, it isn't worth it. If you're not someone who uses massage, if you don't go to the dentist once a year, you're not using a lot of those ancillary kinds of services, just stick to the hospital cover if you want to take advantage of private hospitals or avoid the levy surcharge and the lifetime loading.
00:36:51
Speaker
So yeah, if you are going to get extras, make sure you understand both the benefits you get per treatment or per visit, as well as your overall limits. There are some products out there in the market where they have got like big limits that can sound really appealing. But if you're only getting $20 back when you go to the dentist, then the big limit's not really worth that much.
00:37:13
Speaker
And if you haven't got a hospital visit planned, my advice is to go for the biggest excess because you'll pay a much lower hospital premium. I guess I'm a bit different to me or I don't think it's worth worrying about the no excess for kids.
00:37:28
Speaker
I think that the reason insurers offer that is because very few children go to private hospitals. So to me, that's probably not the big draw card. And I think going back to our principles right at the beginning, agree, think about it before you start, before you pick up the phone, decide how many different insurers you're going to compare. And then once you've done it, make a decision and then
00:37:52
Speaker
let it go. It is impossible to get the absolutely best deal. So just agree how many things you're going to compare, make a decision and move on. And when should people bother doing this comparison exercise? I guess there's a few triggers. There's the age thing when you're turning 30 and you don't want the lifetime health loading to add additional feeds to your premium.
00:38:15
Speaker
Yeah, you can also, it might be if you get a salary increase from your partner because all of a sudden you might kick into the Medicare levy surcharge and I think that's important to think about if you go on maternity leave and then you come back and start working to make sure that you factor that in so you don't get accidentally hit with a big tax bill. So yeah, so we hit some kind of
00:38:36
Speaker
income threshold or an age threshold. And then clearly, if your health needs change, if you decide that you're going to try and get pregnant or do IVF or this chronic disease diagnosis, or if you're done with childbirth, for example, then you might want to consider what plan might suit you. And then there's the actual financial incentive. So in March or April, when the rate review happens,
00:39:01
Speaker
at the end of the financial year, there's lots of promotions. Those times of the year might be good opportunities to have a look. Some people are unconvinced that they need private health insurance, but there's a few, apart from the financial, avoiding the financial sticks, there's a few other reasons why you might want to get it. You might want the peace of mind if you'd like to choose what medical professional attends to you instead of being assigned somebody.
00:39:26
Speaker
and you might want to be able to access a private hospital because it's more comfortable or fresher or calmer, but that sort of depends on what your local public hospital is like. I know when I broke my arm, I got sent to an emergency in a public hospital, and I said to the residents who were attending to me that I had private health insurance, and they said to me, you can do this, you know, you can get your arms set, your wrists reset in a private hospital, but all it's going to be is massive blankets.
00:39:56
Speaker
And I was like, hmm, I'm not so sure about that. It is my riding hand and it is a pretty bad break and I know I'm going to need some rehab. So I think I just need to make a phone call. But, you know, depending on public hospitals are amazing. Melbourne Public Hospital, Melbourne Royal Melbourne on a Saturday night.
00:40:18
Speaker
Um, that is not an amazing question. And I do think like for kids, for example, there are no private children's hospitals, specialist hospitals here in Melbourne. So some cases it is better just to stay public, but in other cases it is great. And I think for me, one of the most important things is problem of you might end up on a waiting list. So particularly if it's something that's not an emergency, like a knee reconstruction, for example.
00:40:47
Speaker
You might have really hurt your knee, but you end up on a three or six month waiting list for a public hospital. And that can really affect your ability to work or even to parent if you're in pain or even if it just affects your mobility. So for me, avoiding having to go on public hospital waiting lists is a really big incentive to keep my private hospital cover. So this has been a chunky episode on health insurance. We're going to skip our life, admin highs and lows of the week and our power tool.
00:41:17
Speaker
We would like to keep these episodes short and snappy, but you can find links to some of the resources we've talked about today in our show notes. And the other thing worth mentioning is that you may have noticed that we've gone to a fortnightly publishing schedule. Hopefully this will give you a bit more time to attend to some of the admin that we're talking about.
00:41:37
Speaker
and they'll certainly give us a bit more time to do the research and prepare these episodes for you. That wraps up this episode for today. So remember, first, look at your current private health insurance to understand your premium, your benefit limits and your claims history. Decide what's important to you before you even start to compare and agree how much time you're willing to dedicate to the comparison process. Pick how many insurers you're going to compare and then jump online
00:42:06
Speaker
phone up the insurer and make a decision and move on. If you'd like to join us on our life admin journey, please head to our Facebook page, life admin life hacks to follow us and share your thoughts on what we're doing and feel free to post any comments or certainly post suggestions that we might be able to use. We hope to see you there. Thanks for listening. Show notes for this episode are available at life admin lifehacks.com.
00:42:32
Speaker
If you're a fan, please subscribe and share the love and tell a friend or review us in your podcasting app.