As you age, taking good care of your health becomes a priority and there will be inevitable issues that come up in relation to your wellbeing. For this reason, having health insurance should be an essential part of your retirement plan.
If you have had the same policy for many years, you may need to update it after you retire.
Take a look at some tips to help you choose the right health insurance.
Retirement essentials: The four tiers of health insurance
Generally speaking, Australian health insurance come in four tiers of ascending levels of coverage:
- Basic
- Bronze
- Silver
- Gold
You will have increasingly better coverage at each level.
There are also in-between tiers, such as Bronze Plus and Silver Plus. These cover some elements of the tier above. Silver Plus, for example, might cover cataract surgery that is normally only covered with a Gold membership.
Your health insurance needs in retirement
In order to decide what level of coverage is right for you, the first thing to do is to assess your health needs.
Sit down and write a list of all your current conditions, medications and ongoing treatments. This way, you have a clear idea of exactly what all your health issues are and what needs to be covered by your health insurance.
You should also write down any possible check-ups or surgical procedures you anticipate needing in the near future. For instance, you might know that you will need that cataract procedure sometime in the next few years, or you have a bad hip that will need attention before too long.
If you are deliberating about having private health insurance in retirement, think about what it would be like to have to wait months for elective surgery for something like benign skin cancer or an ailment that is making you very uncomfortable. Having insurance will mean you only have to wait for a few days or weeks, and your out of pocket expenses will be minimal.
What Medicare covers
Because Australia has an excellent public health care system, the next thing to do is to figure out what Medicare covers and what you will rely on health insurance for.
Medicare covers hospital expenses and provides a safety net for essential healthcare services.
As excellent as it is, Medicare does not cover everything. That’s where you should go through your list of primary health concerns to see what is and isn’t covered. Don’t forget that Medicare doesn’t cover dental or optical, so it can be worthwhile to ensure you have coverage in these areas.
Then there’s the Medicare levy to consider. If your income puts you above the threshold for the levy and you don’t have private health insurance, you may find yourself paying a higher surcharge. It might be worth investing in private health coverage just to avoid this expense.
Retirement essentials: Choosing your health insurance policy
When you choose a policy as part of your retirement essentials, there are a number of things you need to review:
- Hospital cover: Hospital cover is crucial for retirees. It ensures you receive prompt and quality care in a private hospital if you need to have elective surgery. Look for policies that cover a wide range of treatments and include no-gap or known-gap schemes. No-gap means you won't have to pay any out-of-pocket expenses for specific treatments.
- Extras: Most policies will have the option of adding extras cover. Extras mean you can cater your policy to your specific needs by adding coverage that you. For retirees, this might include dental care, optical services, physiotherapy, and more. These will be the things on your list that may not be covered by a standard policy but that you know will be ongoing.
- Waiting periods: Most policies come with waiting periods for specific services, especially if you're new to private health insurance or upgrading your coverage. Make sure you're aware of these waiting periods to avoid any surprises when you need to make a claim.
- Discounts: When you have decided on the level and kind of insurance you need, you should shop around for the best provider. Some agencies offer senior discounts, so it is worth taking the time to see where you can get the best bang for your buck.
Get help to find the right health insurance company
Having quality private health insurance that will cover all your health concerns is one of your retirement essentials.
A financial adviser or an insurance specialist can help you navigate the ins and outs of the many available insurance providers and nail down the policy that is right for you.
IMPORTANT: It is worthwhile talking to a licensed financial planner to understand the implications based on your individual circumstances and needs.
