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More than half of Australians have private health insurance. Around a quarter, or around 4 million people, are members of Medibank, Australia’s largest health insurer and the company at the center of the current cybersecurity breach.
Medibank is committed to supporting affected customers. However, such violations may lead some customers to consider switching companies. Others may want to change companies for other reasons, such as wanting a better deal.
Why change?
Before this latest cybersecurity breach, the most common reason for wanting to switch from private health insurance was to find cheaper insurance.
This is most likely due to year-over-year increases in insurance premiums, which until recently outpaced inflation.
Other reasons to switch include dissatisfaction with the amount billed, seeking additional insurance benefits, or trying to avoid exclusions (non-covered services). In addition, existing insurance may no longer meet a person’s health and lifestyle needs. The Commonwealth Ombudsman provides guidance on the common types of situations that arise when changing insurers and what to expect.
The change could result in a better match between what consumers need from health insurance coverage and what is covered. People can also get good value for money.
As a bonus, it encourages competition between companies and encourages insurers to develop more profitable insurance products.
How can I compare?
Changing insurance companies can be difficult. However, some websites such as iSelect, comparethemarket and finder offer product and price comparisons.
These sites compare less than a third of all insurers, limiting your chances of getting a better deal.
A lesser known option is to use the government website privatehealth.gov.au. Contains detailed information on each policy available in Australia. You and your family may be eligible for limited insurance coverage based on your industry or occupation. We are able to offer policies with lower premiums and higher benefits as the profits are passed on to our members. Terms, including waiting periods, may be more flexible with limited funds.
Government reforms introduced four product levels (Gold, Silver, Bronze or Basic). They are based on standard clinical categories that define what is covered and what is not. All insurers are now required to classify their products into these tiers, making comparisons between insurers easier. What else do you need to know?
Waiting times, discounts and rates
When you change insurance companies, your old health insurance fund will issue an approval certificate to your new fund, transferring the amount you’ve already claimed for the year to your new policy.
When you move to the same level of coverage, if your previous insurer’s payment is up to date, the waiting period you were already serving will also carry over.
However, we may need to establish a waiting period for new benefits and additions that apply under our new policies. You should verify this with your new insurance company.
There are no transfer fees and some funds offer new member discounts of up to 12% per year.
A change in insurer should not affect your lifetime health insurance status. This is a government incentive to encourage people to purchase and maintain health insurance to avoid paying premiums due to age after age 30. This depends on you maintaining a permanent hospital policy.
Insurance companies cannot deny coverage or charge additional fees for pre-existing medical conditions. They charge the customer the same price for the same policy, whether or not the customer changes. However, for those ages 18 to 29, premiums are discounted by up to 10%.
Excesses and exceptions
In exchange for lower premiums, insurance companies may increase discretionary deductions (the amount you pay out of pocket before health insurance begins).
You can also exclude certain diseases from your health insurance to save money.
However, the suitability of these options should be evaluated before committing to such a policy.
You are not the only one who has a hard time
Despite the potential benefits of switching insurers, only about 1.5% of all policyholders switch insurers on a quarterly basis.
An earlier report by the Australian Competition and Consumer Commission found that 48% of consumers surveyed were considering switching insurance providers, while
