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Considering health insurance 

What is health insurance?

Health insurance covers the cost of private hospital treatment, which can help you avoid public hospital waiting lists. It allows you to have treatment where and when you need it in consultation with your GP, up to the policy limits. Having health insurance can mean you can have a greater choice of health service providers offering the service, treatment or procedure that you require.

Why should you consider it?

Making the decision whether to insure you and your family’s health is an important one. Nobody likes to think that they or their children are going to have a health problem, but the reality is that many of us will.

We are all likely to have family or friends who have experienced a sudden or unexpected health scare and have had to wait weeks, months or even years for the appropriate medical treatment in the public system. And no doubt some of us will know of children who have had a health issue requiring surgery such as having tonsils removed or grommets inserted, who have also had to wait a long time to be seen.

Having health insurance can give you the security of knowing you and your family have options should any of you experience a health problem.

Could you afford to pay for private hospital treatment without insurance?

Many people do not realise the actual cost of private hospital treatment. Consider the average costs of common treatments illustrated below. Could you afford to pay for one of these expensive treatments without insurance?

The cost of health insurance claims

Certainly, some people may not need health insurance. Rather than paying premiums, they can afford private treatment if need be because they have adequate savings or investments that can be easily accessed to pay these bills. This is called self-insuring. However, given that many private hospital treatments can cost upwards of $20,000, self-insuring may be financially challenging and may only suit some people. This is especially true in the unfortunate situation where you or another family member has a series of incidents close together.

The facts

  • 50% of health insurance claimants are aged 30-59
  • The most common procedures for women aged 30-49 are gynaecological e.g. endometriosis and hysterectomy. For women aged 50+, the most common procedures are breast cancer, bowel cancer and joint replacement
  • The most common procedures for men aged 30-49 are cancer related e.g. skin, prostate or colon cancer. For men aged 50+ the most common procedures are cardiovascular related e.g. heart attack
  • The most common surgical treatment claims for children are tonsils, adenoids and the insertion of grommets into ears
  • Two of the largest claims made in one year were for spinal procedures and the claimants were both 15 at the time of the claim
  • $121,000 paid to a female claimant aged 33 in one policy year for Cardiovascular and Hernia related issues
  • $187,000 paid to a male claimant aged 60 during his policy duration
  • Over $90,000 paid to three policy holders for prostate/breast cancer (surgery, chemotherapy and radiation therapy) in one year.

Source: TOWER claims statistics, May 2009

How to choose the right policy

Having made the important decision to take out health insurance, the next step is choosing the right policy that will suit your family’s needs and budget. The aim is to find a good balance between cost and cover, so it’s affordable and meets your specific needs. 

Here are some things to consider when choosing the right policy >>

Top tips

Managing affordability

There are ways to help keep your premium in line with your budget without sacrificing essential benefits:

  • Consider higher excess options
  • Take out only the cover you need. You may only need cover for the big expenses such as surgical and non-surgical hospitalisation costs and not need to add on additional options that cover more day to day expenses such as GP, dental and optical.

Take out health insurance before you get pregnant or during pregnancy 

Why? Because once your baby arrives and you add the new family member to your policy, they are then covered for any possible early on health issues. However congenital conditions are not covered.

Hear from some of our health insurance customers who had to make a claim – their stories can help put the cost of health insurance into perspective with the benefits you may gain.