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5 Health Insurance Myths That Could Cost Your Family Money

5 Health Insurance Myths That Could Cost Your Family Money

Health Insurance Myths

There’s a lot of confusion where health insurance is concerned and many people don’t really understand how it all works.

If you’re one of these people, it could mean that your family is paying too much for their health care – either for health insurance or out of pocket costs.
In this guest post, we’re unpicking some of the false ideas that people often believe about health insurance and why it can have a detrimental impact on your family’s finances.

1) Medicare covers us for everything

This is one of the biggest myths for not buying health insurance and it’s one of the most costly misconceptions.

The Medicare system is great but it doesn’t cover everything your family could need. Out of hospital services aren’t included so paying for things like dental treatment, vision correction and physiotherapy will have to come out of your own pocket if you don’t have Extras health insurance – and this could get costly if your family needs to use these kind of services a fair bit in the average year.

2) We can’t afford health insurance

Maybe you know the limits of Medicare but you still don’t feel that health insurance is worth paying for?

The rising cost of health insurance premiums means that many families are dropping their cover or significantly downgrading it to cut costs. While this might help you to save some money in the short term, it can be short sighted if you look at the bigger picture and how much it may potentially cost you if things go wrong.

Even if you’re all fit and healthy at the moment, there’s no guarantee that it will stay this way unfortunately. Accidents and illnesses can happen when you least expect them and elective surgery that isn’t deemed urgent can take months if there’s a long waiting list in the public hospital system.

And for higher income families, it can sometimes be less expensive to buy Hospital cover rather than pay for Medicare Levy Surcharge (MLS).

3) Ambulance cover is always included

If you live in QLD or TAS, you don’t need to worry about arranging ambulance cover. If you live elsewhere in Australia, it is something you need to think about as the cost of an ambulance ride can be eye watering. Some health funds include emergency ambulance cover in their policies but this isn’t always the case.

Health Insurance Myths

4) The cover we have now will always be right for us

As your family gets older, your health needs are likely to change too. If you stick with the same policy, you’ll probably find that you’re not covered for things that you need while also paying for services that you no longer have any use for. You may find that a child needs braces as they near their teens, for example. This is why it’s important to review your family’s health needs and your health insurance policy on a regular basis to make sure that your cover is working for you. And even if you’re needs don’t change too much, don’t be afraid to shop around and compare policies to see if you can get the same kind of cover with another health fund.

5) We’re stuck with the health fund we already have

For those of you who already have health insurance, you have the freedom to take your custom to another health fund without it affecting waiting periods that you’ve already served. Many people don’t realise this and are afraid to switch health funds because they mistakenly believe that they’ll have to serve waiting periods again if they do this.

If you’re moving to equivalent cover elsewhere, portability rules mean that you won’t have to wait it out with your new health fund – provided that you served the waiting period in full beforehand. If you didn’t, you’ll have to finish doing this first before you’re covered. You’ll only have to serve new waiting periods if you upgrade your cover (and haven’t served waiting periods for a particular service) and this is true whether you switch or stay put.

Did you believe some of these health insurance myths? And have you made any mistakes by falling for them?

This is an S2 POST.

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  1. 21/11/2016 / 6:26 am

    I don’t have private health insurance. (I never have.) We do have Ambulance Memberships however. We used our membership once when my daughter broke her arm at school. Thank god we did have cover for that! $$

  2. 21/11/2016 / 6:36 am

    Great tips. We never get enough back from ours but it does seem to be the same as the others. With some need for cancer testing in the family, it’s worth not having to wait. And we had a huge operation last year, which while t a lot still cost a lot, was way less than what we would have been hit with!

  3. 21/11/2016 / 6:55 am

    We have been married for almost 46 years and were both in the same private health insurance (Teachers Health) even before we married. We are now retired and still pay for the top cover as always. It has been an incredible help to us over decades of my husband’s chronic ill-health and surgeries for us both. Of course we are still out of pocket for some things but we have always valued choice and being able to have procedures/surgeries when needed without the waiting list. Ours is a non-profit one, initially for teachers in NSW public schools only but has spread Australia wide and is also for families of teachers (and school staff). Our adult kids kept on memberships and this has seen their families through childbirth x 4 each and stays in long care facilities. Would not be without it, despite its high cost to us now we are on pensions.

  4. 21/11/2016 / 8:15 am

    I don’t have private health, I have had it in the past and couldn’t justify the cost. Thanks for the tips though!

  5. 21/11/2016 / 9:37 am

    The thing that gets me with health insurance is maternity cover. You are still out of pocket about 5k so I decided to go public. I fell like I wasted so much money paying for maternity cover then I never used it.

  6. 21/11/2016 / 10:44 am

    We’ve had health insurance since I turned 30 and basically had to take it up. It is costly but it has helped us in so many ways – with my ACL reconstruction, my daughter’s broken arm and a multitude of glasses, speech therapy appointments and OT too! While it’s tempting to consider getting rid of it I don’t think I ever could because it would be my luck that something would go wrong health-wise the very next day!

  7. 21/11/2016 / 11:01 am

    I don’t have private health insurance but have been looking into it and woah it is confusing. Extras seem like a waste of money – I do see physios and dietitians but I use university teaching clinics which are wonderful quality and very, very cheap.
    It also seems that you can’t choose one level of cover for you and another level for your partner, so we’ll have to get two separate policies as we have very different health needs. Every time I look into it, I get annoyed with how needlessly complex it is and give up.

  8. 21/11/2016 / 2:49 pm

    I’ve had private health for ages and it has definitely come in handy, especially with physio, dental, optical and costs associated with IVF and baby-having. My husband refuses to be on the policy as he is literally never sick or injured and so far it hasn’t been a problem. Thanks for the reminder to review my policy and see if I’m getting the best deal though!

  9. 21/11/2016 / 2:58 pm

    This is absolutely terrible but my husband looks after all our insurance and I don’t even know what we have and what we don’t. I probably should get informed!

  10. 21/11/2016 / 8:59 pm

    I don’t think anyone can afford not to have private health cover nowadays. The amount of times it’s been there for us when we needed it is astonishing.

  11. Caitlyn
    21/11/2016 / 10:33 pm

    I just learned recently that you don’t have to have your hospital cover and extras cover with the same insurer. I’ve now split ours to two different insurers and it is saving us so much. Wish I’d realized earlier!

  12. 22/11/2016 / 2:04 am

    figuring out the ins and outs on insurance is such an ass. That is certainly my husband’s job. My brain explodes.


  13. 22/11/2016 / 8:17 am

    We have private health insurance and I couldn’t imagine having a baby without it – although, each to their own.

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