Know Risk is a community education program designed by the Australian and New Zealand Institute of Insurance and Finance (ANZIIF) to improve our understanding of insurance and how it relates to managing the many risks we all face in life.
How to compare health insurance providers - some hidden truths
Looking for the right health insurance provider can be complicated.
One of the best things about health insurance providers in 2015 is that there is so much choice. Conversely, one of the worst things about health insurance providers in 2015 is that there is so much choice — making the task of finding health insurance that will do exactly what you need it to for a competitive price an incredibly daunting one.
Whether you are a first-time insurance policy seeker or you want to shop around and see if you can get a better deal elsewhere, the sheer number of options you have can be overwhelming. Complicating things further, the number of health insurance comparison websites available to you is significant as well, so now not only do you have to make a choice between health insurers, you also have to make a choice between the websites that will help you find cover.
But fear not, because finding the right health cover for you can actually be pretty simple if you have some decent background information and know where to look and what to look for. So, to help you along, we’ve got the lowdown.
If you’re one of those people who doesn’t mute the commercials when you’re watching TV, you’ll no doubt have seen an advertisement for a website that helps consumers compare prospective health insurance providers — Compare the Market, iSelect, Choosi, Help Me Choose, the list goes on. And, if you’re like us, you’ll want to pin a medal on the person who came up with Compare the Market’s advertising campaign because Sergei the meerkat is an absolute hoot.
But just how much should you trust these sites? In short, you should proceed with caution if you’re going to use one of these websites to help you find the best insurance for your needs and situation.
While some are certainly better than others and not all of these points apply to every one of these sites, here are some things that should have you feeling a little wary about their recommendations:
- They can be misleading when it comes to how many health insurers they actually compare — for example, comparing fewer than 10 of a possible 30+ insurers.
- Some of these sites skew towards suggesting certain insurers and there is a good reason for that — they’re owned by those insurers.
- These sites typically earn money when you purchase insurance based on the site’s recommendation, which could be considereda conflict of interest.
- Most of the sites are pretty transparent about how they’re paid (i.e. through commission from the insurers), but they may not show how much — and most of the time, these commissions are a decent percentage of the insurance premium the website is quoting you.
Given all of this, the meerkat and all of his comparison website mates aren’t looking so flash.
So, should I avoid comparison websites altogether?
Not necessarily. While comparison sites can save you a lot of time and effort, there is a lot to be said for option calling individual health insurers or visiting their respective websites to do the research yourself. After all, a little time and effort spent in the beginning can save you a lot of money and heartache in the long run.
As we have learnt, not all health insurance comparison websites are created equal. If you want to use the services of comparison site, find a website that is genuinely consumer-focused and doesn’t really gain much from suggesting one insurer over another, but to get the best picture, do the hard yards and look at the health provider sites yourself.
In Australia, consider choice.com.au. As the leading consumer advocacy group for Australians, Choice works to save consumers money and avoid dodgy deals by providing unbiased advice.
Another good option is the Private Health Insurance Ombudsman. The whole purpose of an ombudsman is to ensure consumers are treated fairly, so you know this website is legit.
In New Zealand, give consumer.org.nz a go. Like Choice in Australia, consumer NZ is an independent, non-profit organisation that works to advocate on behalf of consumers, as well as educate them and provide sound advice.
What should I be looking for when comparing health insurers?
Before you set out to make a health insurer selection, consider what kind of premium is affordable for you and think about which benefits are the highest priority. Having a clear idea about those things will make it easier for you to make the right choice.
Once you’ve got all that sorted and you start comparing insurers, here are some further things for you to consider and be on the lookout for:
- The last thing you want is to pay the lowest premium only to find that what you’re covered for is minimal. Be sure to investigate just how much money you get back on services — whether it be extras or hospital cover. The lowest premium might seem like a great option in the short term, but try to think about the long-term savings a higher premium will bring if it means you are covered for more things and your annual limits aren’t as low.
- What kind of excess options are available and how does the excess factor into the quote you’ve been given? If finances are of concern to you, you may wish to lower your premium by paying a higher excess. Or, if peace of mind is a higher priority, you might find it more beneficial to pay a higher premium in exchange for a lower excess.
- If you lead a healthy lifestyle or are looking to start doing so, consider what kind of support prospective health insurers provide in that area. Some insurers will cover part of the cost of a gym membership, yoga or Pilates, remedial massage and even new runners. Just because you’re not actually sick, doesn’t mean your health insurer shouldn’t be helping you maintain your health.
- If you have a family, make sure you’re on the lookout for particular benefits that apply to kids. For example, consider how long individual insurers will allow adult children to remain on your policy or if a hospital excess applies to children.
- A lot of insurers will offer a discount on a health insurance policy if you have something else insured with the same insurer. Make sure any quotes factor in any discounts that may apply.
- Different insurers have different waiting periods, so you’ll want to be aware of any that apply, particularly if your motivation for getting health insurance is for a particular service.
- Consider what options are available to you when claiming. For example, you might want to make all of your claims online, or the insurer may have an app that makes things even simpler. The ease with which a claim can be made might not be high on your priority list, but when you actually have to make a claim, the last thing you want is for it to be an intricate and complicated process.