Yahoo Finance 3 health insurance hacks to cut costs and save a fortune
More than a dozen health funds – in recognition of just how tight times are for many right now – have delayed the annual April 1 price hike.
And it sure is a relief… one that it’s hoped will retain your business.
The cost of private insurance has increased by 188 per cent since 2000, according to research by Finder, exclusive to Yahoo Finance.
That’s more than double the rate of inflation, which ticked up by 66 per cent over the same period.
At what actual cost to you? A policy that 22 years ago cost $1,000 would now cost $2,875. For no more cover.
Read more from Nicole Pedersen-McKinnon:
Indeed, health insurance ranks as the second most stressful expense for its holders. One in four Australians name the bills as one of their biggest burdens, says Finder’s Consumer Sentiment Tracker.
And this bombshell from the comparison site’s health insurance expert, Tim Bennett: “Over the past year, insurers’ profits have more than doubled while the number of claims decreased. For many, this raises the dilemma of whether to switch or ditch their policy.”
And premium increases will come, typically no later than October.
But not many people are using their private cover comprehensively, so to speak. There are, in fact, ways to ensure your healthcare is also wealth care… and keep cover that could prove critical.
Here are three healthcare hacks to keep your wealth in check.
Healthcare hack 1: Get extras to cancel the cost
Firstly, know that if you are single and earn over $90,000 a year, or in a couple and earn more than $180,000 a year, it pays to have private health cover.
Remain uncovered and you will wear a penalty in the form of the Medicare Levy Surcharge, of up to 1.5 per cent of your taxable income.
Now, all you need to avoid this is private hospital cover, which may cost roughly the same as the alternative tax slug itself.
But here’s the savvy strategy: If you buy a policy combining both hospitals and extras, you could entirely claim back in payouts what you pay in premiums.
It’s all about the ‘extras’ of which you avail yourself…
Healthcare hack 2: Work the system
You need to use the services to get the benefits, but there are far more services available than you may realise.
Mental health services to remedial massage may be covered, and a whole bunch in between.
My Top 5 little-known (almost) loopholes are:
Claim for kids’ swimming lessons. If you have a decent level of cover, many funds will refund you, say, $200 per year per child for lessons. At this stage of the year, you may already have accrued this cost so could get up to the limit of, say, $400 deposited straight back into your bank account for this.
Claim for gym membership. The gym needs to be medically necessary, but any kind of back or knee niggle will probably get your GP over the line to sign on the dotted line. You can get the requisite form from your health fund. This perk is usually grouped in the same money ‘bucket’ as kids swimming lessons above so you will be able to claim, perhaps, $400 in total a year.
Claim for supervised exercise. Again, you need to be a little injured, but a formal exercise program with an exercise physiologist, physiotherapist or osteopath could be covered. Ask.
Claim for dental: All normal dental could be completely covered with no out-of-pocket costs. That is often two cleans and checks a year for every person in your family, saving possibly $1,600 a year. And, prevention is better than cure.
Claim for glasses: An ageing population means that, at some stage, we will probably all need them. Just watch the reset dates here and make sure you claim what you can, each and every year.
Healthcare hack 3: Streamline your spend
All this need not even cost you as much… if you buy your policy right. One of the best ways to cut the upfront cost is to opt for the maximum hospital excess.
And know that you only pay this excess for the first hospital visit in any given year (check if it is calendar year, financial year or a weird 365-day slice – it happens). Kids also do not pay the excess.
Singles can have an excess of $750 and couples $1,500 and still be exempt from the Medicare Levy Surcharge.
The strategy might shave $500 a year off your premiums.
With the price of living biting everywhere, you may even be able to engineer your health cover so it is free.
Nicole Pedersen-McKinnon is the author of How to Get Mortgage-Free Like Me, available at www.nicolessmartmoney.com. Follow Nicole on Facebook, Twitter and Instagram.
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