3 key questions to ask yourself before buying hospital insurance

By Ysabel Tang

6 minutes

18 May 2018

3 key questions to ask yourself

Even if you're only buying to avoid LHC loading and MLS, it's important to look for quality hospital insurance; a product that satisfies your budget as well as providing peace of mind that you'll be covered if you need it.

But quality means different things to different people. To figure out what quality hospital insurance looks like for you, here are 3 questions to ask yourself before you pick a product:

1. Am I covered for all the hospital procedures and services I need?

To figure out what you need to be covered, you can start with your age and lifestyle. Depending on where you’re at in life, you can narrow your search to basic, mid or top level hospital insurance.

What’s the difference between basic, mid and top? Good question. Here’s how they work.

Gold hospital insurance products (like HBF’s Gold hospital) are the most comprehensive products. Generally, Gold hospital insurance will cover all the thousands of inpatient services in the Medicare Benefits Schedule (MBS).

If you want cover for just about everything, Gold hospital is the way to go.

Then there are mid and basic level products, which have a few procedures or services excluded (not covered) or restricted (covered but to a limited extent). Exclusions and restrictions help reduce the price of hospital insurance, and mean if you don’t need those services, you won’t pay for them.

Before you commit to a product, make sure you know exactly what’s covered, what’s excluded, and what’s restricted.

This is especially important if you’re comparing health funds because they all have slightly different definitions of basic, mid and top. For example, one health fund might cover thousands of medical procedures and services on their basic product, while another might only cover eight.

2. Do I want cover for a private hospital, a public hospital, or both?

There are two hospital options in Australia—public and private hospitals.

Most hospital insurance products will cover you in a private and public hospital, while some only cover you in a public hospital.

Why does this matter?

If you’re eligible for Medicare, you’re also eligible for free treatment at a public hospital. Using your private hospital insurance in a public hospital basically means you’re paying for something that would otherwise have been free.

Another consideration is public hospital waiting lists. If you’re a public patient, you’ll go on a public hospital waiting list if you need elective surgery. In a private hospital, you choose your time of treatment.

So why would you use your private hospital insurance in a public hospital?

If you decide to go to a public hospital as a private patient, you can choose your doctor and gain access to a private room (if it’s covered on your product). This can be handy if you live in a rural area that only has a public hospital. It’s also handy if a public hospital is just the closest to your home.

At the end of the day, whether you choose to be a private patient, or get hospital insurance that covers you in both public and private hospitals comes down to whether you’d like cover for a private hospital, or not.

3. Do I want cover for just accidents or more than that?

One of the cheaper hospital insurance options is ‘accident only’ insurance. It’s a basic hospital insurance product that will only let you claim if you are unexpectedly injured by an external force or object e.g. a footy tackle gone wrong or a fall downstairs.

To claim on accident insurance, health funds generally require you go to the hospital within a certain amount of time—this can be as little as 24 hours. If you don’t get help within the health fund’s specified timeframe, you won’t be able to claim.

Plus, if it’s an emergency, you’ll probably go to a public hospital emergency department anyway—and that’s free. It’s only if you require follow-up elective surgery (non-emergency surgery) that your accident cover kicks in, and that often needs to happen within a specific timeframe as well.

So, should you get accident only hospital cover?

If you’re young and healthy, looking to avoid the LHC loading and/or MLS, and just want cover for accidents, accident only hospital insurance isn’t a bad option.

But if you do decide to get accident only insurance, just keep these things in mind:

  1. For any situation beyond an accident, e.g. cancer or psychiatric care, you won’t be covered. For non-accident situations, you’ll need to go through the public hospital system, where you may wait a long time before receiving treatment.
  2. Not all accident only hospital insurance products include cover for urgent ambulance trips. Without cover for urgent ambulance, if you need one, you’ll pay for it out of your own pocket. In WA, that can cost up to $967.

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