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Health insurance

Owing to a rise in lifestyle diseases and double-digit medical inflation in India every year, health insurance has become a necessity for every individual.

To elaborate on the shift in mindset, an individual has started looking at the broader aspect of their life and its healthcare needs. And the best part is that they have started accepting the fact that they actually do need health insurance.

In this article we will see:

What is health insurance in Australia?

Australian residents are covered by Medicare, a Commonwealth government program which provides Australian citizens with free or subsidized cover for in-hospital treatments and some out-of-hospital services. However, Medicare might not provide cover for all your health care requirements, for example, you’ll generally have to pay for ambulance services, IVF, optical, and most dental treatments.

Because Medicare might not cover all the health services you need, Australians are encouraged to purchase private health insurance.

Is private health insurance worth it?

Private health insurance can help you pay for medical services and treatments not fully covered by Medicare. Additionally, if you earn more than $90,000 annually and don’t have private cover, you’ll pay an additional 1% to 1.5% in tax, called the Medicare Levy Surcharge (MLS). Health insurance might be worth it if you want to avoid certain tax consequences, are starting a family or have specific health concerns.

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2. Importance of Health Insurance

Buying a health insurance policy for yourself and your family is important because medical care is expensive, especially in the private sector. Hospitalisation can burn a hole in your pocket and derail your finances. It will become even tough, if the person who brings in the money, is now in a hospital bed. All this can be avoided by just paying a small annual premium which would lessen your stress in case of medical emergencies.

A good health insurance policy would usually cover expenses made towards doctor consultation fees, costs towards medical tests, ambulance charges, hospitalization costs and even post-hospitalization recovery costs to a certain extent.

 

3. Benefits of having a Health insurance Policy

1. Cashless Treatment: If you are insured, you can get cashless treatments as your insurance company would work in collaboration with various hospital networks.

2. Pre and post hospitalization cost coverage: Insurance policy also covers pre and post hospitalization charges up to the period of 60 days, depending on the insurance plans purchased.

3. Transportation Charges: Insurance policy also covers the amount paid to ambulance towards the transportation of insured.

4. No Claim Bonus (NCB): This is the bonus element which is paid to the insured if the insured does not file a claim for any treatment in the previous year.

5. Medical Checkup: Insurance policy also provide options for health checkups. Free health checkup is also provided by some insurers based on your previous NCBs.

6. Room Rent: Insurance policy also covers room expenses depending on the premium being paid by the insured.

7. Tax Benefit: Premium paid on Health insurance is tax deductible under section 80D of the Income Tax Act.

 

4. How to Select the Right Insurance Policy

It’s difficult to select the best insurance policies as all insurance company provides a similar type of insurance plan. Hence some of the important points that any Person should look before purchasing any plans are:

1. Sum Assured

2. Minimum Entry Age and renewability clause

3. Room Rent Capping

4. Inclusion and Exclusion

5. No Claim Bonus

6. Other Benefits

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5. Eligibility Criteria

In India, people under 45 years of age are not required to undergo a mandatory health checkup when obtaining a health insurance policy. They are, however, required to disclose any pre-existing conditions such as diabetes or hypertension. It is, therefore usually advised that one should get a health insurance when young so that the premium would be less.

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6. Documents Required when buying a Health Insurance Policy

There are few documents that you need to provide such as:

1. Age proof – Any one of Birth Certificate, 10th or 12th mark sheet, Driving License, Passport, Voter ID, etc.

2.Identity proof – Driving License, Passport, Voter ID, PAN Card, which proves one’s citizenship.

3. Address proof – Electricity Bill, Telephone Bill, Ration Card, Driving License, Passport, should clearly mention the permanent address.

4.Some plans require a medical check-up (usually for elder people above the age of 45 years)

5. Passport Size Photo

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7. Types of Health Insurance

1. Individual Health Insurance:  This policy covers the health expenses and hospitalization expenses of individual who has taken the policy. Premium under this policy is determined as per the age of insured.

2. Family Health Insurance Plan: Under this policy, an individual can include all the family members against multiple diseases under a single cover.  Family health plan offers a fixed sum assured for the family members, which can be availed by all members of the family or by any one individual in the family.

3. Senior Citizen Health insurance Plan: This policy is designed for the senior citizens or individuals over 60 years of age offering protection from health issues during old age.

4. Surgery and Critical Illness Insurance Plan: This plan is suitable for the insured that requires treatment against critical illness, such as kidney failure, paralysis, cancer, heart attack etc. As the medical expenses of these treatments are very high, the premium applicable to these types of policies is also high.

5. Maternity Health Insurance Plan: This policy covers costs, including pre and postnatal care, child delivery expenses of newborn babies. This policy is also covered for the newborn up to a certain period of time as mentioned in the plan. Ambulance costs are also covered.

6. Personal Accident Plan: This policy covers hospitalization expenses in the event of an accident. Premium amount is depending upon the amount of cover taken.

7. Unit Linked Health Plan: These plans offer a unique combination of insurance and savings both at the same time. This policy helps in building a corpus which can be used to meet those expenditures which are not covered by the insurance policy.

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Top 10 private health insurance companies in Australia by market share

  1. Medibank: 26.9% market share. Has over 40 years’ experience delivering health insurance to 3.7 million customers via their Medibank and AHM brands.
  2. Bupa: 26.9% market share. The foreign-owned private company entered the Australian market in 2002 and currently serves over 4 million customers in Australia and New Zealand.
  3. HCF: 10.4% market share. A not-for-profit health fund established in 1932, now covering over 1.5 million Australians in 52 locations across the country.
  4. nib: 8.3% market share. Established in 1952, nib is an international health partner serving over 1.5 million customers in Australia and New Zealand.
  5. HBF: 8% market share. A not-for-profit organisation founded in 1941, providing health coverage to more than 1 million members.
  6. Australian Unity: 3% market share. A mutual company owned by its members established over 175 years ago with 194,000 private health insurance policyholders.
  7. Teachers Health: 2.3% market share. A private health fund exclusively for the education community in Australia with over 156,000 members.
  8. GMHBA: 2.3% market share. Since its beginning in 1934, GMHBA has remained a not-for-profit health insurer, now protecting more than 400,000 Australians.
  9. Defence Health: 2% market share. For over 65 years Defence Heath provides coverage to the Australian Defence Force (ADF) and wider defence community, today with more than 131,000 policies provided.
  10. CBHS: 1.5% market share. Since 1951 CBHS protects the health of Commonwealth Bank of Australia’s (CBA group) employees and families, with over 100,000 members today.

Source: AMA Private Health Insurance Report Card 2018

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Benefits of private health insurance

There are many advantages to having private health insurance when living in Australia. You’ll generally be covered for treatments and services excluded or only partially covered by Medicare, and have more control over your choice of doctor and hospital appointment times.Having private coverage allows you the benefit of being treated as a private patient in a private or public hospital.

Other health insurance benefits you can look forward to, include:

  • Protects you from unforeseen, high medical costs.
  • Shorter waiting times for elective surgeries.
  • Privacy, comfort and control with private hospital rooms.
  • Provides you the option of choosing your preferred doctor and surgeon to treat you.
  • Generally, you’ll be able to mix and match hospital and extras cover options to fit your specific requirements.
  • Might coverspart or all the costs of general treatments like dental, physiotherpay and optical depening on the Extras policy you have.
  • Get money back from Australian government rebates.
  • Avoid financial penalties like Medicare Levy Surcharge and Lifetime Health Cover loading.
  • Gain access to membership discounts and special offers, like gym memberships and vouchers.
  • Reduce the burden on the public health system.
  • 24/7 telephonic support from heart and cancer nurses from select insurers.
  • People living in rural areas might find access to private services more practical.

 Health Insurance Claim Process

A health Insurance policy equips you to get the best healthcare treatment without worrying about the huge costs payable at the time of discharge. Therefore knowing about the claim process is an essential piece of information that the insured individual should be aware of at all times.

The two main types of health insurance claim which an individual can choose from when making a claim are:

  • Cashless Claim Process

When the insured individual provides their health insurance details to the respective hospital, he/she begins to receive treatment. Upon discharge, the hospital will forward the medical bills to the designated health insurance company. The company will then audit the expenses and settle the outstanding payment due to the hospital. This process is hassle-free for the insured as the payments are between the hospital and insurance company.

  • Reimbursement Claim Process

In the reimbursement claim process, the insured individual who has been admitted to a certain hospital pays for the entire treatment until discharge. Once the insurer has paid for the treatment and hospitalization costs incurred, he/she have to make a reimbursement claim to the particular insurance company. The insured individual will have to provide original bills of the hospital to the health insurance and claim reimbursement. The insurance company will audit the claim and will then decide to approve or reject it. On approval of the insurance company, the claim will be made to the policyholder. The insurance company will notify the insured individual in case the claim has been rejected.

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