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Private Health Insurance – is it worth it?

There has recently been plenty of discussion about value for money of Private Health Insurance.

We have known for a long time that a lot of people don’t get great value for money from their extras cover. We see it every day with the gaps that people pay for treatment, despite the premiums they pay every month. This gap is only getting bigger year by year.

For example, there are many insurers who pay exactly the same rebate as they did 10 years ago. There is one large insurer that hasn’t changed their rebate from as far back as the 1980s! It just doesn’t come close to matching up with cost of living increases, premium increases or the private insurers’ annual profits.

The restriction on the amount that the insurers will allow for extras rebates means that the people that need it the most often run out midway through the year.

If you go to a preferred provider practice, you get higher rebates, so it seems like a better deal. However, maybe not …..

You have the same amount for extras allocated to you per year – it just means that you go through your allocation quicker, and you would spend the rest of the year paying full tote odds. Smaller rebates last longer.

In addition, the provider has their fees dictated to them by the insurer. In order to make it work, the practice needs to see a greater volume of patients, which is exactly the opposite principle that we are working to.

Plus, we now know that a preferred provider doesn’t mean a better provider (despite what they imply with the title and even what customer care say on the phone). We only found this out when we originally applied to a number of funds and were knocked back because ‘there were enough preferred providers in the area’ ie it is simply a matter of who is there first, and it has nothing to do with standards or quality.

Other recent developments that make this a worthwhile conversation are

  • the restrictions that are being placed on what is covered by private health insurance by government policy, like the April 1 changes
  • the way in which individual insurers operate

Individual insurers

The restrictions that different insurers place on what is claimable and what isn’t claimable means that it is really important that you do your research to make sure that you are getting a good rebates in the way that you tend to use them. 

If there is a restriction on the amount that you can spend on groups, and you tend to use physio groups, then it makes sense to find the fund that does the best for you.

We have seen the restrictions increase significantly with some funds to the point where people are wondering why they actually pay for extras cover. When you run out of extras in May, it makes you think that perhaps the cover isn’t how it should be for you.

The private health insurers conduct audits on practices to check that the practice is complying with their policies. This is why we have made such a concerted effort with our documentation when the changes happened in April 2019, why we get outcome measures from everyone that does groups, and why we need regular reviews for group participants.

The private health insurers are asking us to breach patient confidentiality by demanding access to all your medical history and clinical notes during audits without your knowledge or direct permission. This permission is signed off when you join a private health insurer. In the past, insurers only had access to data, not sensitive personal clinical information. We are not comfortable at all with this, but they have your permission. Please check this out if you are uncomfortable with it too.

Government policy

Despite the wealth of evidence for the value of exercise, the value of physio intervention, the value of Pilates as a mode of rehabilitation, the changes that came about earlier in the year are a signal that there are likely going to be more restrictions placed on what is covered by Private Health Insurance.

For most, it hasn’t affected what they can do because we already comply with these changes because of how we already deliver our programmes. However, there are still people that are doing exercise groups with us to maintain their health and for maintenance of a previous condition that are not able to claim on their health insurance because it is maintenance and they are doing it in a preventative way. We should be encouraging this, not penalising it!

It looks like the natural therapies review is something that happens regularly, and our concern is that each time, there are going to be more changes and more restrictions to how you get to use your private health insurance.

Our recommendations

Because of a number of things that have happened lately we strongly recommend that you:

  • check your entitlements with your provider, especially in regards to groups
  • make sure that you are clear on your allocation on physiotherapy and all other health services you tend to use
  • find out what the restrictions are with each of the codes
  • compare your cover with other providers for extras cover

NB: you don’t have to have your hospital cover with the same provider as your extras cover

We know that there is a growing number of people putting aside their extras premiums and ‘self-insuring’ ie hanging on to their premiums and using that money rather than paying monthly to an insurer then having your entitlements choked by their rules. This might be worth serious consideration.

After all, your money should be spent on your health in the way that you choose.

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About the author

Russell Mackenzie
Russell Mackenzie
Russell is a physiotherapist and clinic owner in Adelaide, South Australia. He received his physiotherapy degree from UniSA in 1994, and has since also become a Credentialed McKenzie Therapist. Russell is the co-owner of Adelaide West Physio + Pilates and more recently, Adelaide West Headache Clinic, which was formed after becoming a Watson Headache Certified Practitioner to show his dedication and passion for headache and migraine treatment. Russell also aims to spread the word about the role of physiotherapy and non-surgical methods of helping persistent pain, low back pain and other conditions. Learn more about Russell on our About Us page.
Russell Mackenzie

Russell Mackenzie

Russell is a physiotherapist and clinic owner in Adelaide, South Australia. He received his physiotherapy degree from UniSA in 1994, and has since also become a Credentialed McKenzie Therapist. Russell is the co-owner of Adelaide West Physio + Pilates and more recently, Adelaide West Headache Clinic, which was formed after becoming a Watson Headache Certified Practitioner to show his dedication and passion for headache and migraine treatment. Russell also aims to spread the word about the role of physiotherapy and non-surgical methods of helping persistent pain, low back pain and other conditions. Learn more about Russell on our About Us page.
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This explains the reasons why regular reviews are important for anyone doing our exercise groups (not to mention that you need them to claim health insurance rebates!)