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Have you got a ‘junk’ health insurance policy?
With over forty health insurance funds in Australia, it’s a fiercely competitive market at the best of times. When it comes to comparing the available policies with all these health funds, it can often be an overwhelming experience trying to decipher the important differences.
There are thousands of private health insurance policies to choose from so it’s not surprising that consumers are confused.
What is a ‘junk’ policy?
To put it simply, a ‘junk’ policy is insurance jargon for a “basic” or “cheap” policy that provides you with a low level of hospital cover at a low cost.
What does a ‘junk’ policy look like?
- Accident only and ambulance cover
- A small handful of emergency procedures, such as: accidents, wisdom teeth, appendix, gynecological procedures, knee investigations and reconstructions
- Limited procedures as a public patient in a private hospital – You have the ability to choose your own doctor but only in a public hospital
- Most ‘junk’ policies have an extensive list of exclusions, such as: all other in-hospital services where a Medicare benefit is payable. It’s import to note that this is the difference between a ‘junk’ policy and a comprehensive level of basic cover. Insuring you’re covered for thousands of commonly claimed on procedures – cancer, gastrointestinal investigations, colonoscopies, hernia repairs etc. All the unknowns!
Four things to note when it comes to junk policies:
1. Accidents may only be covered if you seek medical attention within a set amount of hours (usually 24) and may only cover you for a set amount of days. This could leave you seriously out of pocket for procedures and services, especially if you are in the beginning/mid stages of treatment.
2. Choosing a policy where you are a public patient in a private hospital still requires you to wait on the public list with everyone else. In most cases it is advertised that you can choose your doctor/specialist but this can be limited as your choice of practitioner may not work in the public sector.
3. Procedures covered in ‘Junk Policies’ like wisdom teeth, gynecological procedures, knee investigations and reconstructions, can often require additional when you go in for the procedure. For example, if you were to go in for a gynecological procedure for Endometriosis surgery you may get the minor surgery covered but if you require major surgery eg) something cancerous to be removed you could either find yourself out of pocket or waking up with a surgery half done (depending on the finer details of your policy). It is important to ask specifically what Medicare item numbers are required for your procedure before going under.
4. Some of the more serious services like rehabilitation and palliative care often lie under ‘Restricted Services’ which means you are limited to a public hospital and unfortunately can end with long wait periods due to limited facilities. These services are important as they are required in the final stages of an accident, injury and/or illness.
Ensure you are covered for what you need
Remember ‘Junk’ policies can still serve some sort of purpose. For people earning over a certain threshold trying to avoid the Medicare Levy Surcharge and for people wanting to avoid Lifetime Health Cover Loading but are happy not to have a more comprehensive level of basic cover.
At iSelect, our aim is to tailor a policy suited to your needs and budget without compromising your health and to ensure you understand your level of cover.
The information in this article is intended for general information only. We recommend that you obtain advice from an independent taxation advisor regarding your own individual situation. iSelect does not compare all products in the market. Not all products are available at all times.