Designer Health Care
Sydney Morning Herald
Saturday June 17, 2000
There's an abundance of extras you can add to your insurance shopping basket, for a price.
Deciding on the level of private hospital insurance you want is only one part of the health fund equation. The other is the ancillary cover, and although there is no obligation to take out ancillary cover on top of hospital cover, most fund members do.
"It's a particular mind-set - just as most people insure their homes and their contents," says HCF general manager Phil Soden. "Most people who take out private hospital cover take out ancillaries as well."
Equally, although it is possible to take out ancillary cover without private hospital cover,
not many opt for such a situation.
Choosing ancillary cover can be a daunting task. Gone are the days when it was simply a matter of deciding whether you wanted optical and dental, and perhaps a bit of physiotherapy thrown in. Now the range of benefits on offer are many and varied - from the traditional to the more "alternative" offerings, such as acupuncture and naturopathy. And many funds have bundled together packages of hospital
and ancillary cover, further complicating the issue.
Despite the wide range of ancillary cover on offer, the funds Money spoke to agreed that dental cover was far and away the most popular, closely followed by optical. Next was physio, and then chiropractic.
"There is a move towards natural therapies, but, generally speaking, the traditional optical
and dental comprise the bulk of ancillary cover," Jones says.
So how do you choose which ancillary cover you need and which you can do without?
"You need to look at the benefits in comparison with costs of services," Jones says. "You want to look to see what you get back for what you are spending."
You also need to look at which stage of life you are in, he says. For instance, families often like to be covered for orthodontics.
Soden adds: "We find families like speech therapy, pathology, teeth, eyes and physio.
This is because even healthy young people can need physio and chiro."
AXA's provider relations manager, Keith Finney, says that there are a few tips and traps for those searching for ancillary cover.
"You need to think of the things you are likely to be using and try to establish what the benefits are," he says.
But, he concedes, comparing benefits between funds can be complicated. Some funds have arrangements with dentists, physios and chiros, so it is best to find out if this is the case with your fund, he says.
One trap to look out for is when a fund offers quite high benefits for commonly used ancillaries, such as a teeth cleaning and scaling, but low benefits for less common ancillaries, such as dental crowns.
And be aware of low maximums, he says. Some funds might guarantee to pay 80 per cent of the bill, but if it is to a maximum of $500 and your crown costs $1,000, it will not be of much use, he says.
Also, be aware of the possibility that your benefits will lessen the more you use the system. For example, the fund might pay for the first five physio treatments at an attractive rate, but the benefits go down the more you have the treatment.
Loyalty bonuses, either in higher benefits or higher maximums, are something else to look for, he says.
Soden says it is important to bear in mind that funds pay ancillary cover in different ways. HCF, for instance, pays a percentage of the bill based on the fund's schedule of fees.
A scale and clean at the dentist might be $100 on the fund's schedule, he says. "If we say we pay 60 per cent of that, it is not 60 per cent of the total bill, but 60 per cent of $100." So if the dentist charges $200, the patient gets back only $60.
Similarly, he says, the fund will pay a dollar amount for glasses - say, $170. The member knows that whichever pair of glasses is chosen, the payment will be $170, he says.
Alternatively, HCF members can, as a membership benefit, go to a HCF dental centre or eye-care centre.
"You don't get any out-of-pocket [expenses] when you go there," he says. "There is no gap."
Finney advises people to check before they take out ancillary cover that the procedure is
not already taken care of under their private hospital cover.
"We've taken the view that if you take out hospital cover, you expect to be covered for everything. So if you need physio while in hospital, it is covered by the hospital table."
If alternative forms are healing are your passion, you may well find a fund that offers what you want - but you will need to do your homework.
Says Finney: "If you are interested in [a range of alternative treatments], then you need to shop around. For example, not all funds will pay a benefit for Chinese herbal medicine."
But while funds have added less-traditional types of ancillary cover to their range in response to member demand, they say it is not used often.
"People seem to want the cover, but don't use it to the same level as dental and optical," Finney says.
Soden agrees: "We also cover acupuncture and naturopathy. We put them in in response to member demand, but people don't claim on them much."
© 2000 Sydney Morning Herald