The big myths about health insurance and why they could cost you

A health-conscious person who has some body niggles but works hard to keep them in check, wouldn’t mind losing a little weight, likes to use vitamins and supplements for greater wellbeing and prefers to have private health insurance.

Sound like you? If so, that’s because you’re part of the Starts at 60 community! We surveyed readers, and more than 70 per cent said they felt in good (36.8 per cent) or very good (33.6 per cent) health. More than 11 per cent even said they were in excellent shape.

There are, of course, some heath worries. Almost 40 per cent felt the effects of arthritis, and some back and joint pain was common, as were issues with high blood pressure. A considerable chunk (23.5 per cent) struggle with anxiety or depression, while losing weight is a priority for more than 30 per cent of readers.

But today’s 60-pluses are a pro-active bunch. Almost 30 per cent buy vitamins and supplements, usually from their local chemist, to boost their general wellbeing, while others (17.5 per cent) use them to ease arthritis or joint pain.

And almost two-thirds (62.6 per cent) choose to purchase private health cover, which makes sense given that data from insurer nib show that patients face an average wait of 110 days in the public system for a hip replacement and a 195-day wait for a knee replacement. Meanwhile, people who choose to skip the public waiting list to have elective surgery done privately could face bills of as much as $25,202 for a hip replacement and $22,250 for a knee replacement.

But are you as proactive in managing your health insurance as you are your health in general? Your health and wellbeing needs change throughout life, but many people consider switching health insurers to be too hard and stick with the same health fund and cover even if it no longer meets their needs or their budget.

Given the Starts at 60 community’s interest in actively managing existing conditions and maintaining good health, it’s worth knowing that some insurers, such as nib, offer health management programs that help members manage chronic conditions such as diabetes or chronic obstructive pulmonary disease (COPD). Such health management programs can also assist members who, for example, want to manage joint pain by losing weight or receive therapy for anxiety or depression.

It’s also important to check that you’re not paying for cover of treatments that are no longer relevant, and that you do have cover for conditions that become more common with age. For example, having cover for vision or hearing issues becomes more important, while the pregnancy-related elements of a policy are likely to be superfluous!

If your cover doesn’t meet your needs, shopping around for health cover that’s a better match is your next step.

And for the four out of five people fear that switching insurers will involve a mountain of paperwork or hours on the phone, a survey by One Big Switch found that people who actually did change health funds said it was “easy” or “very easy”. Some insurers, such as nib, will do the work for you, even contacting your old health fund to let them know you’re saying goodbye.

There are some myths, though, that can put people off switching health funds, such as the ones that say they’ll have to re-serve new waiting periods or lose cover for pre-existing conditions. 

The truth is that you don’t have to re-serve waiting periods if you transfer to a policy that offers the same or a lower level of cover as your old one. You must serve a waiting period if you switch to a cover with new or higher benefits.

The same usually applies when it comes to excesses – if you’ve already paid an excess on a visit to hospital, for example, and you switch to the same or a lower level of cover, you usually won’t have to pay an excess a second time if you’re hospitalised again in the same year. It’s worth checking with your new insurer that this is the case, though.

The benefits paid by your old fund may be taken into account by your new fund when it looks at what your annual benefits limits are in the year you switch. Not all insurers work to a calendar year so make sure you check before switching.

Your old health fund should, however, refund any contributions you paid in advance (possibly minus a small administration charge) and Choice advises consumers to negotiate with their new insurer to match any bonus or discount they may lose by leaving their previous provider.

Overall, switching insurers is relatively simple, so if your cover doesn’t recognise your current health and wellness needs, it may be time for a change.

Have you recently reviewed your health cover? Did you find it lacking or was it still relevant to your needs?