Research funds and compare their policies
There are so many things to think about when you're planning to start a family. Watching the diet? Check. Regular exercise? Check. Taking folate? Check. Surfing the net for cute baby clothes? Check. Applying for private health insurance? Well, check... or should that be cheque?
According to the government's Private Health Insurance Administration Council (PHIAC) a steadily-increasing number of us are choosing to have private health insurance. Membership of private funds reached an all-time low of around thirty percent in 1997, but they have since made a marked improvement, with membership figures currently hovering at around forty-five percent. So - how about you? Should you have private health cover? What is it, anyway? And what do you look for?
Should you have it?
While ultimately only you can answer this question, the government tries to have at least some influence over your decision-making process by implementing a range of carrot and stick initiatives:
Carrot: the private health insurance rebate. In 1999 the government introduced the health insurance rebate, whereby the government rebates at least 30% of your insurance costs. While there is currently debate around means testing this benefit, it is currently available to everyone.
Carrot/Stick: A carrot for those aged 30 or less (but a stick for the rest of us) is the lifetime health cover loading, whereby if you do not have hospital cover on the 1st of July following your 31st birthday and then decide to take out hospital cover later in life, you will pay a 2% loading on top of your premium for every year you are aged over 30. So for example, a 40 year old taking out cover for the first time will pay 20% more than a 30 year old for the same cover.
Stick: the medicare levy surcharge, whereby a surcharge of one percent is levied on taxpayers who earn over a certain amount (currently $77,000 for a single person or $154,000 for a family) if they do not have private health insurance.
Given all of that, it's often easier to have private health insurance than not - but where do you start your search, and how do you find one that suits your possibly-soon-to-be-pregnant needs?
Where to start?
How many health funds are there in Australia? Can I join whichever one I like? Will I be covered for any type of admission, in any hospital? If you are less than sure about any of those questions then your first port of call should be the government's private health insurance consumer website: www.privatehealth.gov.au. The website has some great general articles as well as contact details for every health fund in Australia. It explains why you should consider health insurance, and what types of cover are available.
What to look for?
Once you have a good understanding of the general principles, you can start looking for a policy that suits your needs. This however is the area in which many of us falter, with research undertaken recently by online comparison site iSelect (http://iselect.com.au/) indicating that around 43% of health insurance policy holders have only a rough idea of what their policy includes. "Unfortunately many of us have a 'set and forget' mentality with insurance," explains iSelect's general manager of Corporate Affairs, Paul Cross. "But it's so important to understand what's included and what's not. That means doing your research and reading the fine print." Here are a few suggestions to get you started:
Do it now! If you're thinking of starting a family in the near future, then consider applying for health insurance now. "It's vital that you make sure you are covered for pregnancy and birth before you fall pregnant as many funds have a 12 month waiting period for this cover," says Mr Cross. "Not all 'couples' policies will automatically include pregnancy and birth so read the fine print."
Consider which extras you need. As a single person or even part of a couple, you may have chosen not to include extras cover in the past, for things like physiotherapy or dental. "Now that you're a family, you may want to revaluate this to reduce your future costs," suggests Mr Cross. "Children are expensive! Ask the fund what pregnancy-related extras they cover - some will include cover for things like pre- and post-natal exercise classes, remedial massage and acupuncture.
Add your new baby to your policy. When your new bundle of joy arrives, be sure to add him or her to your health insurance policy. This does not happen automatically so it's important you contact your fund within the first couple of weeks after the child's birth so that they will be covered for future claims.
Review regularly. Lastly, and irrespective of pregnancy, it's important to review your health insurance regularly, to make sure that it stays appropriate for your changing needs. "Funds can only change premiums once a year, but they can change the services they provide for a given premium at anytime," explains Mr Cross. "So it's worth checking your health insurance regularly and comparing it with other policies offered by your fund and other health insurers in the marketplace."
