What you need to know before buying health insurance for your family

It can be difficult to decide which health insurance policy is right for your family. Here are some tips for doing your homework.

Work out exactly what health services your family needs so you can compare policies. Picture: iStock

With so many health insurers with so many policies vying for your business, it can seem an overwhelming task to choose the health insurance policy best suited to your family’s needs.

It’s understandable that, with varying types, levels, prices, inclusions, excesses and exclusions to compare, it can be difficult to decide which policy option is right for your family.

To take the anxiety out of the task, we’ve taken a deep dive into the world of health insurance cover for families to provide you with information so you can approach it with confidence.

HOW DOES FAMILY HEALTH INSURANCE WORK AND WHAT IS COVERED?

Family health insurance is a way for families to cover all members of your family in one encompassing health insurance policy. Where Medicare provides limited healthcare for all Australians, private health insurance offers policy holders substantially more options and control over their care and, depending on the type and level of cover you choose, family health insurance policies can:

* Work as a financial buffer to ensure you’re not left out-of-pocket when a family member unexpectedly needs health care,

* Reduce hospital waiting times for you and your family,

* Allow you to select your preferred hospital, doctor or specialist for treatment,

award you and your loved ones a private room in a public hospital, and

save you big dollars on health services that you and your family members may use regularly such as physiotherapy, optometry, dentistry and orthodontics, or speech therapy.

HOW MUCH IS FAMILY HEALTH INSURANCE AND WHAT LEVEL OF COVER DO YOU NEED?

How much your family’s health insurance policy will cost depends entirely on your requirements and the policy you choose. Hospital cover is offered in tiers – gold, silver, bronze and basic and all carry a different premium and different categories for cover.

GOLD tier level hospital cover

To ensure your family have every possible option for care should any one of you end up in hospital, gold tier covers all 38 categories of hospital treatments products health insurers offer in Australia.

SILVER tier level hospital cover

Alternatively, your family may not need some of the inclusions gold tier policies offer, so choosing silver tier may prove to be cheaper and more relevant for your family. Silver tier cover will vary between policies as some of the treatments available are at the insurer’s discretion or are offered in a restricted basis – so be sure to check what those restrictions are to ensure the cover it offers is adequate.

BRONZE tier level hospital cover

This is a limited level of cover and while it will cover important categories such as palliative care, ear nose and throat, kidney and bladder and gynaecology, other categories such as medically necessary breast surgery and diabetes management are dependent on the individual policy. As with silver tier, bronze tier categories are sometimes listed as ‘restricted’ so do your homework and ensure those restrictions do not inhibit your family’s health insurance priorities before deciding on a policy.

BASIC tier level hospital cover

This tier is an inexpensive cover that offers restricted cover for a handful of essential categories such as rehabilitation, psychiatric services and palliative care. Additional categories included will vary depending on the policy so do your research before signing up to the basic tier level to ensure its cover is adequate for your family.

Extras cover

If you’re worried about being able to afford your child’s orthodontics in the coming years, one or more of your family members wears glasses or is a sportsperson prone to injury, you might also consider combining your hospital cover with ‘extras cover’ for general or ‘out of hospital’ healthcare services not covered by Medicare.

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The right policy will depend on your family’s individual needs. Picture: iStock

WHAT TO LOOK FOR TO PICK THE BEST FAMILY HEALTH INSURANCE?

Before you even begin to look for family health insurance policies, think about what your family’s personal healthcare priorities will be in the coming two to five years. For example, are you planning for another baby? If so, you’re going to need pregnancy and baby cover included in your policy.

Consider your family’s budget and how much you can afford to pay towards your policy each month. Also think about the excess payment you can afford to pay on hospital admission – keep in mind that while excesses can vary, the less you opt for on sign up, the more you’ll potentially pay in premiums.

This way, when you come time to compare policies, you’ll know exactly what your family do and don’t need cover for and can confidently select the health insurance policy best suited to your family.

CAN I JUST HAVE EXTRAS HEALTH INSURANCE FOR FAMILIES?

Yes, you can purchase an extras-only health insurance policy for your family, however, you will have to pay the Medicare Levy Surcharge, which is levied on Australian taxpayers who earn above a certain income and do not have hospital cover.

Depending on your circumstances, this will mean any savings you make throughout the year using your extras-only insurance policy could be cancelled out by the Medicare Levey Surcharge, so get professional tax advice and do the sums before signing up to an extras-only policy.

CAN YOU ADD FAMILY MEMBERS TO EXISTING HEALTH INSURANCE COVERAGE?

Generally speaking, you are usually allowed to add a dependent child – an unmarried person under the age of 18 years – to your family health insurance policy. Some health funds will cover dependent children who are older than 18 years if the family member is studying full-time, unmarried or not living with a partner – but you will need to verify this with your health insurer directly.

This article was created in sponsorship with iSelect

Originally published as What you need to know before buying health insurance for your family