Private Health Insurance Free Comparisons – Get Lower Premiums

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by

Neerav Bhatt

Most people would agree that comparing different private health insurers is too hard, which is why I’ve written these tips to help you find the right kind of private health cover for the cheapest price.

Until recently in Australia your only choice when choosing a Private Health Insurance plan for you or your family was:

  1. To muddle through all the different brochures and websites from different Private Health Insurance companies and make comparisons to the best of your ability
  2. Or give up and let a insurance broker like iSelect, HICA or Health-Link choose one for you after you filled in their questionnaire.

Both these approaches have problems:

  1. The do it yourself approach was pretty impossible because each health fund offered plans with such different terms and conditions that it was like comparing apples with pears.
  2. Insurance brokers like iSelect, HICA or Health-Link could only sell you a health insurance plan from the funds they were agents for – usually less than a 1/3rd of the 30-40 Government Registered Health Funds, so it was quite likely that you missed out on the best plan for you.

Finally in April 2007, the federal government forced the private health insurance industry to provide information on all the health insurance products they offer in a standard format at http://privatehealth.gov.au to allow for easier comparison of their products.

But by itself this won’t be enough to help you decide whether you need it because the privatehealth.gov.au site assumes that everyone will want Private Health Insurance, and doesn’t really have enough background details to explain the pros and cons of having different kinds of cover or self insuring and buying no private cover at all.

For example not everyone knows that: Under Medicare, all Australian residents who decide to be admitted as public patients are entitled to free treatment in a public hospital. Even if you have private hospital insurance you can still be treated as a public patient (for free) if you want to.

For an impartial guide I recommend reading the abc.net.au Consumer Guide to Private Health Insurance which covers all the important topics like: Hospital cover, Private VS Public hospitals, Avoiding unexpected costs, Extras cover, Self Insurance, How to Keep premiums low and Carrots and Sticks like the high-income Medicare levy, The ‘Lifetime Health Cover’ scheme and the controversial government rebate on annual health fund premiums.

Personally I have private health insurance with GMHBA because I think they’re the best low cost quality private health fund

Comments

33 responses to “Private Health Insurance Free Comparisons – Get Lower Premiums”

  1. Greg

    The brokers you speak of have most likely short listed all the covers worth having – so although some funds and products are not available from them, my experience is that they’re probably not worth having. I’ve looked at the Govt site and only those with detailed knowledge of health cover will find it a good resource. Others are most likely better off seeking the advice of an expert such as a broker. I know I saved hundreds with HICA

    EDITOR: I disagree, im with a fund not marketed by HICA and it’s significantly cheaper than any other comparable health fund product oin the market

  2. Ron

    We went looking for health insurance and the big companies (Medibank & HBA) seem to have a set range of policies that are meant to “fit your needs”. But the problem is they dont take the time to actually talk to you about your own needs rather their own products. We used a broker and they actually spend time with you and compare some of the options be it price or features or how much you can claim on things we needed and i know we saved money not just on the monthly cost but what we will get back. They may not have all the funds or even the biggest but at least you get quality advice and they explained things that the funds probably wouldnt ever bother to tell you.

  3. Peter

    I disagree with the article. Brokers offer the best service for the consumer considering they understand the market. Many Brokers work with the top funds too, mine does. If you want to find a Broker go to their Association’s site at: http://www.phiia.org.au

    EDITOR: well then we can agree to disagree, I think that brokers are not adding value unless they’re able to make recommendations from the full pool of all available health funds both for-profit and not-for-profit

  4. Jonathan

    Firstly I work at a non-profit (NP) health fund. So you may or may not choose to publish my comment. However my post may be interesting for you…

    Earlier this year Australia’s leading independent consumer magazine invited every health fund to participate in their annual review of health insurance.

    Only 16 health funds out of about 38 were prepared to have their policies compared side by side. They were alphabetically: AHM, AUSTRALIAN UNITY, GMHBA, HBA, HBF, HCF, HEALTH PARTNERS LATROBE, MBF, MEDIBANK PRIVATE, MUTUAL COMMUNITY, NIB, NRMA, PEOPLECARE, SGIC and SGIO.

    The consumer magazine based their ‘Best Buys’ for hospital cover on price, conditions, restrictions and benefits.

    The number of health insurance best buys by health fund were:

    You could read the article online or I’m pretty sure your local library would have this popular consumer magazine.

    18 GMHBA (NP)
    12 Latrobe (NP)
    10 Peoplecare (NP)
    8 HCF (NP)
    8 Medibank (wants to be for profit in future)
    5 HBA (for profit)
    4 AHM (NP)
    2 Australian Unity (for profit)
    2 MBF (wants to be for profit in future)
    1 Mutual Community (for profit)
    1 NRMA MBF Alliance (wants to be for profit in future)
    1 SGIC MBF Alliance (wants to be for profit in future)
    0 HBF (NP)
    0 Health Partners (NP)
    0 NIB (for profit)
    0 SGIO MBF Alliance (wants to be for profit in future)
    72 Total

  5. Neerav

    Hi Jonathan

    Your query as to whether I’d publish the comment couldn’t have been any more off the mark because I’ve been a GMHBA member for several years and I know it’s great value 🙂

    Also I tend to choose products that are not for profit because I trust them more eg: Members Equity Bank, Australian Super etc

    FYI readers Jonathan is the Executive Manager of GMHBA and the consumer magazine he’s referring to is Choice magazine

  6. DavidTan

    Thanks for the insight. I have just bought my Private Health Insurance too recently. Could had probably saved more time if I had read this first 🙂

  7. Paul

    I am healthy so I never use my private health insurance, but I am forced to take private cover because the premium is actually cheaper than paying the extra medicare surcharge if I don’t have private cover. I don’t want my premium to be subsidising other peoples running shoes, glasses and massages.

    What I want to know is what is the cheapest private health cover which covers the minimum necessary to claim the 30% tax rebate and avoid the extra medicare surcharge, and how much does it cost?

    EDITOR: Hi Paul. Like you I only have private hospital cover because I’m forced to for tax reasons. Personally I have private health insurance with GMHBA because they have really low premiums for my circumstances, check them out and see if they can save you money

  8. Jonathan

    Hi Neerav,

    On the topic of health insurance brokers…

    The consumer watchdog, the ACCC is of the view that iSelect has engaged in misleading conduct in contravention of the Trade Practices Act.

    The ACCC was concerned that iSelect: made representations that misrepresented:

    – that it compared a significant proportion of health insurance policies available to consumers

    – the number of health insurance policies which it compared for consumers, and

    – that it compared for consumers all the health insurance covers available to them and could find the best suited policy for a consumer’s needs at the lowest price.

    So the biggest health insurance broker, iSelect has undertaken to the ACCC and the public that it will:

    – not make the representations of concern in specified circumstances where they may be misleading

    – inform certain customers who it arranged to purchase a health insurance policy of the range of insurance policies which it compared for them, and

    – maintain a trade practices compliance program.

    I should explain that GMHBA used to sell a lot of health insurance through iSelect. However as of December 2005, iSelect was no longer authorised to sell GMHBA health insurance. This means that all enquiries about GMHBA health insurance from people who bought from iSelect should be directed to GMHBA on 1300 4 GMHBA (46422) and not to iSelect.

    GMHBA takes the Code of Conduct of our health insurance brokers very seriously and we do our best to ensure that our brokers are trained to give honest accurate helpful advice.

    Should people still wish to use a health insurance broker, they can see a detailed list of brokers GMHBA trains and trusts

    Thank you for helping to clarify this situation.

    Jonathan Crabtree
    Executive Manager
    GMHBA Health Insurance

    EDITOR: thanks for the inside information Jonathan. PS glad to hear that GMHBA is staying not for profit 🙂

  9. Scooter

    Great! A GMHBA cheer squad!

    Just remember that some of Choice’s best buys have included IOR and Goldfields. What happened to those funds and where are their members funds now?
    Price should not always be the determinant if people are looking for long term quality cover.

    EDITOR: Considering GMHBA started in 1927 I don’t think it’s in any risk of going out of business any time soon!

  10. Jonathan

    It’s wise to be cautious Scooter. Yet GMHBA is both a not-for-profit health fund and financially very strong. The regulator (PHIAC) has also been very vigilent on health funds where their management expense ratio (MER) becomes too high. That’s usually one of the first signs a fund is in trouble as it’s costs are spread over too few members.

    Now that British BUPA (HBA) has announced a $2.41 billion bid for MBF we might expect the privatised for profit NIB, to be on the lookout for poorly managed health funds. The only problem is NIB’s own costs are going through the roof…

    PHIAC’s annual report is due out next week and it will report on the health insurance industry cost structure. Some might view this as a shopping list perhaps… Time will tell!

    As to your question

    “…IOR and Goldfields. What happened to those funds”

    The health fund HCF bought IOR in November 2002 and the next month Goldfields ‘merged’ with Healthguard (with guarantees from HBF) and continues to trade as GMF Health.

    There were 90 health funds in the early 1970’s and nearly all the rationalisation took place between not-for-profit funds. The difference this time is individuals may appear to be seeking to get rich quick and putting profit ahead of people and principle…

    Watch this space!

  11. Neerav

    Thanks to the Budget, from July many of us are about to be suddenly free of the Medicare Levy Surcharge.

    The gift will be worth $500 a year to someone earning $50,000; $700 a year to someone earning $70,000; and so on…

    We will no longer be prodded into buying fake private health insurance and we will be able choose to buy the real thing (or not) based on its merits.

    Those merits are not obvious – at least not in my case … In an emergency there is no better place to be than in a public hospital.

    You can get elective surgery there as well, and if the wait is too long you can buy it in a private hospital.

    We shouldn’t be made to feel guilty for spending our money wisely.

    Hospitals need public support. Private health “insurance” does not.
    – source: Peter Martin

  12. bluehat

    I do find a great tips here on health insurance. I often try to persuade my friends to get the health insurance. A well selection need to be made, some insurance do give good and quality services for a little fees.

  13. Ed Harris

    As many of you know, her in the US…National health-care is a hotly debated topic. I know I’m biased, but keeping options in the hands of the insurance companies is much more desirable than letting the government run the show.

  14. Ed Harris

    “I think that brokers are not adding value unless they’re able to make recommendations from the full pool of all available health funds both for-profit and not-for-profit”

    I agree with that statement. As a broker for 27 years, if I don’t make a helpful recommendation to a potential client, I don’t expect to be compensated.

    One other thing…the big “instant health insurance quote” sites will generally quote inaccurate (Yes, that’s right!)rates. The reason is that major health conditions are not taken into account when quoting. Obviously, as a broker, I would always take into account all conditions.

  15. Katherine Valley

    I think that non-for-profit health insurance companies are the best way to go. In Australia HCF Private Health Insurance is a good choice because they do not pay their profits to shareholders. The profits are all returned to members who get to claim for more things. I think that HCF pay about 7-10% more back on health insurance claims than the other funds

  16. Nick P

    I know I’m an American broker, but if the system down under bears any similarity to ours then I’d like to echo a sentiment expressed a few times in these comments: I may represent forty different insurance companies, but frankly, thirty of them aren’t worth anything at all. I only discuss the valuable, reasonable carriers with my clients because I don’t want them stuck with coverage that will evaporate at a moment’s notice.

  17. jimmy

    I have been a member of HCF for8 years top cover and i would like information regarding shoes
    Am i intile to a rebate for special foot ware order by my GP ?
    thanking you
    Jimmy

  18. John Daniels

    Anything relating to the value of GMHBA fund

  19. John Daniels

    Anyone tried Westfund?

  20. Anthony

    I understand that there’s a fair bit of “weird” stuff that goes on with these comparison websites. Apparently iSelect is a broker and only sells what they get paid for (I saw that whole ACCC comment by the GMHBA guy above and I also heard that too), and Cannex makes companies pay for their ratings if they want to show them! I came across two other sites that claim to be independent: http://www.helpmechoose.com.au and http://www.oz-ecover.com.au. Keen to know whether anyone has any experience with them. Their prices also seem to match with what the fund’s offer.

  21. John Daniels

    I did extensive research before changing my health fund. The best three I picked were Peoplecare,Westfund and CUA.
    We went with CUA ( Australia’s biggest Credit Union) because 1. They were cheaper 2. Better rebates for dental stuff 3.They covered all hospitals in WA. 4. They did the first month free.

  22. Ian

    GMHBA are good, except they have low fees for anaesthetists, and there is usually a large gap payment, whereas most other funds cover the gap.

  23. Lulu

    Further to discussion on health funds and in particular the latest round of health fund increases for 2010 – I am with NIB who are now a for profit organisation. There has been a lot of publicity about their latest increase in premiums – an average of 5.95% across their products. This publicity doesn’t reveal the minimum and maximum % increase. I pay Topcover and my increase is 15% which I find unacceptable. This forces me to look elsewhere.

  24. Gary Young

    Looking for Australia Private Health Cover for 410 Retirement Visa requirement

  25. rigsey

    The number of conditions covered (benefits) varies widely, cheaper policies often offering less benefits.

  26. John

    In the past the difficulties of finding the right insurance lay in the lack of information. Nowadays, it’s all right there. There are so many comparison sites out there that show you your best options. Just be careful because some sites only shows policies that directly benefit them, which would easily mislead you.

  27. Jonathan Crabtree – former GMHBA staff member

    Having listed on the ASX, NIB has become a millionaire factory for execs. However does that give them the right to force a takeover of not-for-profit Geelong health insurance fund GMHBA?

    Here’s my open letter. What do you think?

    ===========================
    GMHBA HEALTH FUND OR NIB WEALTH FUND
    I’d like to share some thoughts on what may become a NIB inspired feeding frenzy of gluttonous greed.

    The reality is NIB’s share price may drop once the health insurance rebate is means tested or removed as is ALP and Greens policy. NIB could easily face another takeover threat from an overseas predator seeking to increase premiums or strip the assets of both NIB and GMHBA.
    So any pledge to preserve local jobs, branches policies and premiums could evaporate once NIB is taken over. The precedent is there. Fifty inefficient funds have disappeared since 1970. Luckily successive GMHBA boards have prudently guided Geelong’s local fund through the 1930s depression and WWII. There have also been seven recessions in Australia since 1960 and the scars of 1990 and the Pyramid collapse are still there for many.

    GMHBA’s constitution gives the Geelong based board a mandate to look after the health fund for the benefit of current members as well as generations of families to come. The board could have given up many times over the last 75 years and ‘sold out’ to a better value, better managed and lower cost base competitor with superior service to members. Yet the current board may argue NIB has none of these attributes.

    Under the current carbon tax scenario, Geelong’s economic health and employment levels are uncertain. So future mayors, footy presidents, ‘footy funny folk’ as well as Geelong families might condemn the current GMHBA Board if it ‘sold out’ to a less efficient and fundamentally unstable share price driven health fund.

    There are only four things that will ensure GMHBA continues to be able to help members pay their ever increasing medical bills; a lower cost structure, friendly service, value and integrity. My guess is that’s all the GMHBA Board seeks to preserve and what successive generations of Geelong families have admired most about its local health fund.

    So while healthy debate is good, the worth of wisdom is vital. GMHBA has neither been a ‘millionaire factory’ nor wasted members’ premiums. It has never been faced with the moral dilemma of paying $100,000 for surgery or denying the claim to pay extra in dividends to shareholders.

    So look out for more Geelong ‘paid celebrities’ and GMHBA members recommending a cash-grab. It will be interesting to see who hops aboard the gravy train to Newcastle! Yet best we simply stay calm, happy and healthy and let GMHBA’s board do its job – nothing more.

    The stark and harsh question is over the years ahead, when it comes to the health, pain and possible death of a loved one, what sort of organisation will you hope is there to help you?
    These are the truths and issues left unsaid. So if you care about this issue, why not go ‘on the record’ and post a comment?

  28. Jeff Mould

    Have a look at Central West. Couples top hospital and extras for under $200 per month.

  29. Tim

    I think brokers don’t give you the best advice possible out there. I’m just wondering though, would anyone be interested if there was a full chart comparing all the insurance companies side by side in terms of that they offer? Or would that be a headache to read?

  30. Jonathan

    I would like to post a quick word of caution to consumers using so called ‘independent’ health insurance comparison services out there.

    Please bear in mind that, aside from the government site mentioned in the article, most of the so called ‘independent’ services out there offering a comparison service only display providers with whom they have commission deals in place.

    I would suggest that the best course of action for consumers is to use these comparison services in conjunction with the privatehealth.gov.au website so that they get a true idea of the policy options available to them.

  31. Macca

    I am currently looking at changing our families policy from HBF (WA) to one more aligned with NSW.
    I quickly have found that no proper comparison and analysis can be done by the consumer because you need to find out what each fund pays per Item No. The health funds have them sitting there on their data bases but will not tell you or send them on. They will tell you what the payout figure is if you give them a couple for an example but that’s it. We need legislation to enforce all health funds to disclose what each pays out. I know that there are thousands of numbers but it wouldn’t take long to merge all the figures and check over what type of procedures you most value or are likely to use. These comparison websites are just a waste of time as they just regurgitate whatever the funds tell you anyway. Just a dopey lazymans way of feeling reassured.

  32. Jeff

    Hi Macca

    When I retired a few years ago I spent several weeks researching health funds for the best deal and created a spreadsheet detailing 14 of these. I was able to get details of payouts for each item at least annual allowances from the web sites of each fund and make comparisons based on this. You are right there is nowhere you can look at payments for individual items and this would be useful but not the be all and end all IMHO. I was surprised to find based on my analysis that HBF rated last of the 14 funds I reviewed based mainly on their excessive premiums. Central West was #1 for me so I transferred from HBF and have not regretted it. I have had several major operations since then and they have looked after me each time without complaint from me. I couldn’t rate them too highly particularly as their premiums are relatively cheap.

  33. Julia

    I’m so glad I came across this thread! I’m in a dreadful catch 22 situation, where as a single parent, over the last few years, I have paid out $1000’s each year in private therapy (OT, speech, physio, etc) for my sons with developmental delays, braces & oral surgery, glasses, Orthotics, etc, and trying to work out if it’s even worth having health insurances in the first place. Up until now, I felt it wasn’t, but decided just recently to take another look. I’ll plan to look up the suggested websites of brokers – hopefully they can work out if it’s worth for us. It seems, if some heath funds only pay out up to $550 per year per child for speech, when I pay $4k-5k..possibly I have answered my own question!

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