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COPYRIGHT 2003 Australian Consumers' Association
Like many health fund members, earlier this year Jodie and Craig Thomas received a letter from their insurer informing them that the cost of their hospital and ancillary cover had increased. While the average increase was 7.4%, Jodie and Craig's premium had gone up by a staggering 100%. Like other health fund members, they had less than two weeks to review their cover before the huge premium increase came into effect.
Jodie says, "After paying into this fund for over 13 years, I'm now looking at changing my policy. I've been looking around at the different options available but it takes a lot of time to look through each of them, and the terminology they use is quite difficult to understand."
To make this task easier we've looked at three different levels of Best Buys for hospital insurance:
* Best-value Top Cover, if you want a policy that gives you comprehensive cover.
* Budget cover if you want a reasonable level of cover just in case.
* And we've listed the cheapest policies available, which we picked purely on price. They are far from the best ones available but may suit you if you only want private hospital cover because of government initiatives and penalties (see Self-insurance an option?, page 16, for some of these).
WHAT LEVEL OF COVER?
While you're entitled to free public hospital treatment, private hospital insurance provides you with access to private hospitals, which may be more luxurious. You also have a greater choice of doctor and probably shorter waiting times for elective surgery (such as cataract eye surgery) than in the public system.
However, you may have so-called 'out-of-pocket' costs in the private system, which arise if your policy requires you to pay an excess or co-payment when you make a claim. The upside of an excess or co-payment, of course, is that you usually pay a lower premium if your policy has one--it's a gamble you decide whether or not to take. You may also have out-of-pocket costs if your hospital hasn't got a contract with your health fund; you may have to pay the 'gap' if your doctor charges above the Medicare Schedule fee, unless your health fund covers this under a gap scheme or agreement.
Hospital insurance policies can be divided into four different types of cover, with different premium levels to match:
* Full cover: Cover for a wide range of treatments in a private hospital, after normal policy waiting periods have been served.
* Standard cover: For up to 36 months after taking up the cover, some procedures are only covered if you're treated as a private patient in a public hospital. You get to choose your own doctor in a public hospital but you'd usually be in a shared ward and may not have the higher levels of convenience you might expect in a private hospital. The advantage of these policies is that they're usually cheaper than the full-cover products, and once you've served the benefit limitation period, you've got full cover for a relatively good price.
* Limited cover: Regardless of your length of membership, some procedures are excluded from...
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