Could Your Family Save Money By Switching Health Funds?
With the annual premium increases coming into play, families have been urgently prompted to look at ditching their health insurance to save money. Many people don’t realise that it’s not as black and white as it might seem, and it’s not just a case of either dropping your cover or accepting your health fund’s rate rise.
You also have the option to shop around and switch to another health fund, and many families find that they can save money by doing this. You may be able to cut your costs without needing to change your cover level by switching to an equivalent policy with another health fund. And if you do decide that you want to upgrade or downgrade your cover to better suit your family’s health needs, you may be able to get more value for money by buying a higher or lower level of cover elsewhere rather than sticking with your current health fund.
Is Switching the Right Option for You?
First of all, you’ll need to decide whether you want to carry on with the level of cover that you have now or alter it in line with your family’s needs. To do this, you need to think about the kind of services that are going to be important for your family over the next year and how your cover reflects this. You may need to upgrade to broader cover if you need services that are not included on your policy at the moment but there is also potential for downgrading your cover if you no longer need pregnancy and birth services, for example.
Once you’ve got your needs and priorities pinned down, it’s time to shop around and see what your options are. If you’ll need to change cover level, see how much this will cost with your current health fund and compare it with like-for-like policies elsewhere. If you can get the same cover cheaper with another insurer, you’ve got good reason to switch.
Shopping around can seem daunting and time consuming, especially when you’re a busy mum who needs more hours in the day to get everything done. Here at www.HealthInsuranceComparison.com.au, we can do the hard part for you by comparing policies with a range of health funds. If you like what you see, you can look at switching your custom to another insurer.
Is Your Cover Affected?
If you’re not upgrading or downgrading your Hospital cover level, portability rules mean that you don’t have to serve waiting periods again with a new insurer – provided that they have been served in full before you switch. If not, you’ll have to serve the rest of the waiting period before you can make a claim on your new Hospital policy.
The other key point involves continuity of cover. When you switch, you need to make sure that you have a gap of no more than 7 days between your existing Hospital cover ending and your new policy starting. Otherwise, you’ll probably have to re-serve waiting periods even if you’re switching to equivalent cover.
It’s also worth bearing mind that you’ll need to be fully paid up with your premiums on your existing policy to take advantage of the portability rules.
If you’re switching up in terms of Hospital cover, you will have to serve waiting periods for new services as you would if you upgraded with your current health fund.
For Extras cover, you could potentially be required to serve waiting periods with a new insurer but in reality, some health funds will recognise a waiting period that has already been served and honour it.
What About Lifetime Health Cover?
As long as you continue to maintain your Hospital cover, Lifetime Health Cover (LHC) status will not be affected and you won’t have to pay any extra loading unless you let your cover lapse in the future (and even then, it can be fine if you’re still within your permitted days without hospital cover). For LHC purposes, the main concern is whether you have an eligible Hospital policy and while this is the case, it doesn’t matter which health fund you are with.
How to Switch
Timing is everything if you don’t want to be paying for both your current and new policies at the same time, and to make sure that you don’t have to re-serve any waiting periods because of a gap in cover.
If you cancel your current policy before the new one kicks in, you may be caught out by this so it’s better not to pull the plug on your existing cover until you have started being covered by your new insurer.
Make sure that your existing cover ends on the same day that your new policy begins so that you won’t still be paying for the old cover on top of your new premiums. If you paid by Direct Debit, check that the agreement is cancelled and that no further payments can be taken from your account.
You’ll need to get a clearance certificate from your current health fund when you cancel your policy with them, and this will need to be sent on to your new insurer.
This is an S2 POST.