Worried about cybersecurity, costs or service? Here’s how to change health insurers
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Please note members: The Seniors Discount Club has a commercial relationship with Compare Club, which means we may be compensated if you compare your health insurance with them.
More than half of Australians hold private health insurance. About one quarter, or almost four million people, are members of Medibank, Australia’s largest health insurer and the company at the centre of the current cybersecurity breach.
Medibank has promised to support affected customers. However, such breaches may trigger some customers to think about switching companies. You may also wish to switch companies for other reasons, including wanting a better deal.
Getting value for your money shouldn’t be stressful. Image Credit: Shutterstock.
Here are some tips to get started.
Why switch?
Ahead of this latest cybersecurity breach, the most common reason for wanting to switch private health insurers was to find cheaper coverage.
This was most likely driven by annual premium increases.
Other reasons for switching include dissatisfaction with claim amounts, looking for additional policy benefits or trying to avoid exclusions (services not covered). Existing cover may also no longer suit someone’s health needs and lifestyle. In fact, it’s quite common to readjust your plan or insurer as your needs change.
Switching can lead to better matches between what a consumer needs from their health insurance and policy inclusions. You may also get better value for money.
There’s the added bonus of promoting competition between companies, prompting insurers to design better-value insurance products. It’s a win-win.
How do I compare?
Switching health insurers may feel daunting. However, companies such as Compare Club provide product and cost comparisons. The team at Compare Club are experts at finding amazing deals for our valued members! In fact, you can read about Maddie’s first-hand experience here.
Compare Club will take care of all the heavy lifting for you – their team of seniors health insurance experts will scour a panel of trusted Australian health insurers to find the top policies for your lifestyle.
The Compare Club Team can help you from the comfort of your own home. Image Credit: Compare Club
In most cases, when you switch to a cheaper or equivalent level of cover, you won't have to serve any new waiting periods. So there's really nothing stopping you from getting the best possible deal!
Over the last 5 years, Compare Club’s experts have saved the average Aussie $320** by helping them stop paying for cover they don’t use.
To get started finding the best health insurance for your specific needs, simply compare today and switch to a better provider. It's easy and only takes a few minutes!
What else do I need to know?
Waiting periods, discounts and fees
When you switch insurers, your old health fund issues a clearance certificate to your new fund, with the amounts you’ve already claimed in the year carrying across to your new policy.
If switching to a similar level of cover, any waiting periods you’ve already served also carry over, provided payments with your old insurer are up to date.
However, you may have to serve waiting periods for any new benefits and inclusions applying under your new policy, a point to clarify with your new insurer.
There are no exit fees for switching and some funds offer discounts to new members, subject to a 12% per annum cap.
Changing insurers should not affect your Lifetime Health Cover status – the government incentive to encourage people to buy and keep hospital cover to avoid an age-based loading on their premiums after the age of 30. This is provided you continuously maintain a hospital policy.
Insurers cannot refuse you cover or charge you more based on pre-existing health conditions. They should charge customers the same price for the same policy, regardless of whether they are switchers.
Excesses and exclusions
Insurers are allowed to increase voluntary excess levels (the sum you pay out of your own pocket before health insurance coverage kicks in) in return for cheaper premiums.
You can also choose to exclude certain medical conditions from your health cover to save money.
However, you should assess whether these options suit you before switching policies.
You’re not the only one finding this hard
Despite the potential benefits of switching insurers, only around 1.5% of all insured people switch insurers each quarter.
An earlier Australian Competition and Consumer Commission report found that while 48% of consumers surveyed thought about changing insurers, only 14% actually switched.
This likely reflects the complexity of health insurance policies, and the perceived difficulty of making a switch, leading to a tendency for people to 'set and forget'.
But as we mentioned earlier, comparison companies can take the stress out of switching.
So, members, will you compare and save?
Parts of this article first appeared on The Conversation, written by Anam Bilgrami and Henry Cutler of Macquarie University.
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