More than half of Australians are pregnant Private health insurance.
About a quarter, or nearly four million people, are members of Medibank – Australia’s largest health insurer and the company at the heart of the Electronic security busts.
Watch the video above: How to protect yourself after a data breach.
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Medibank promised to support affected customers.
However, such violations may lead some clients to consider switching companies.
People may also want to switch companies for other reasons, including wanting to get a job Better deal.
Here are some tips to get you started.
Before this latest cybersecurity breach, the most common reason for wanting to switch private health insurance companies was to find cheaper cover.
This was likely driven by annual increases in premiums that, until recently, outpaced inflation.
Other reasons for switching include dissatisfaction with claim amounts, seeking additional policy benefits or trying to avoid exclusions (services not covered).
The current cap may also not fit a person’s health needs and lifestyle.
The Commonwealth Ombudsman provides a guide with the common types of situations encountered when switching health insurance companies and what to expect.
Switching can lead to a better match between what a consumer needs from health insurance and policy entries.
People may also get better value for money.
An added advantage is the promotion of competition between companies, which prompts insurers to design better value insurance products.
How do I compare?
Switching health insurance companies can be daunting.
However, many websites, such as iSelect and finder, compare the market and provide product and cost comparisons.
These sites compare less than a third of all insurance companies, which limits your chance of getting a better deal.
A lesser known option is to use the government website privatehealth.gov.au.
This contains details of every policy available in Australia.
You and your family may be eligible to join a restricted insurance company based on your industry or occupation.
These may provide lower premiums and policies with greater benefits, as profits are returned to members.
Terms and conditions, including waiting periods, may be more flexible with funds tied up.
Government reforms introduced four levels of products (gold, silver, bronze or basic).
These are based on standard clinical categories that define what is and is not covered.
All insurers are now required to classify their products to these levels, which makes comparison between insurers easier.
What else do I need to know?
Waiting times, discounts, and fees
When you switch insurance companies, your old health fund issues a clearance certificate to your new fund, for the amounts you’ve already claimed in the year that carry over to your new policy.
If you switch to a similar level of coverage, wait periods you’ve already served are also carried over, provided payments with the old insurance company are up to date.
However, you may have waiting periods for any new benefits and add-ons that apply under your new policy – a point to make with your new insurer.
There is no exit fee for switching and some funds offer discounts for new members, subject to a cap of 12 percent annually.
Changing insurance companies should not affect the status of lifetime health coverage — the government incentive to encourage people to buy and hold hospital cover to avoid an age-based charge on their premiums after age 30.
Provided that you constantly maintain the hospital policy.
Insurance companies cannot deny your insurance coverage or charge you additional fees based on pre-existing health conditions.
They charge customers the same price for the same policy, regardless of whether they are a convert.
Although people between the ages of 18 and 29 can get a discount of up to 10 percent off their premiums.
Excesses and exceptions
Insurance companies are allowed to increase voluntary excess levels (the amount you pay out of your own pocket before health insurance coverage begins) in exchange for cheaper premiums.
People can also choose to exclude certain medical conditions from their health coverage to save money.
However, you should evaluate whether these options suit you before switching to such policies.
You are not the only one who finds this difficult
Despite the potential benefits of changing insurance companies, only about 1.5 percent of all insured people switch insurance companies each quarter.
An earlier Australian Competition and Consumer Commission report found that while 48 per cent of consumers surveyed had considered changing insurers, only 14 per cent had actually switched.
This likely reflects the complexity of health insurance policies, and the perceived difficulty in making change, leading to a tendency for people to “set it up and forget it”.
How could switching be easier?
The annual rate increases due in April may cause some people to re-evaluate their insurance needs.
The government could create more “incentives” to switch, encouraging consumers to reassess their situation.
Private health insurance advertisements often pick up around this time.
The government can also provide information to help people compare how much they pay compared to their peers.
If people discover that they are paying more than others with a similar cap, that can be a good incentive to switch.
People may also consider switching if they find that the level of coverage they choose does not match up with their peers.
However, some consumers may not be “wake up” enough to switch.
A large percentage of people who purchase hospital cover purchase private health insurance to avoid paying the additional Medicare tax fee.
These types of consumers may be less likely to value their health coverage as their health care needs change.