012: Comparing private health insurance
Mia and Dinah talk about principles for efficient comparison shopping and fast decision making, before getting into the process and tools specific to reviewing private health insurance.
To avoid spending days researching better deals and ending up with analysis paralysis, there are several principles to embrace when comparing products or services:
- Keep the end in mind – Make sure you know what you are aiming to achieve – saving money, finding better quality products or services – before you start comparing. Decide how long you are willing to dedicate to the research stage, and for what benefit.
- Satisfice more and maximise less – Establish standards for what is good enough and accept and embrace them rather than being resigned to it.
- Use rules of thumb to reduce effort – Decide what criteria you will use to compare providers, and how many providers to compare.
In respect to health insurance, Mia and Dinah give an overview of what Medicare covers versus insurance, explain industry jargon and outline and things to consider when comparing different types of cover, such as:
- Medicare Levy Surcharge
- Health Insurance Rebates
- Lifetime Health Cover Loading
- Difference between Hospital and Extras cover
- Waiting periods
- Limits and benefits
- Comparison sites
They each talk about their own process for comparing private health insurance and Mia’s satisfaction when she dedicated an hour and a half to the task to save $100/month with higher annual benefits on the services that are important to her.
How to compare private health insurance:
- First, look at your current financial situation and cover to understand your premium, what rebate level applies to you, your benefit limits and claims history
- Decide what type of treatment, customer service and price saving is important to you before you even start to compare and agree how much time you are willing to dedicate to the process
- Pick how many providers and cover types you are going to compare
- Jump online to familiarise yourself with each provider’s products, then call up each of them and switch when you find a better deal.
Members Own Health Funds – comparison site with cover from 16 Australian not-for-profit and mutual health funds
PHI Extras Calculator – a Google Drive spreadsheet, built by Life Admin Life Hacks, which helps you compare extras cover
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