Do I need a broker to choose my health insurance?

A broker will tell you, “yes”. But in reality, you have the tools to make an informed choice for yourself.

Brokers first entered the private health insurance industry in the early 2000s and their use has sky-rocketed since then. They have big advertising budgets, quirky ads and a simple message: ‘it’s all too confusing so let us choose for you’.

Brokers offer a comparison service with low, or no, upfront costs to you, the consumer. What they don’t tell you is that is they are only comparing a selected range of products in the market.

Insurers pay brokers a fee to be included in their comparisons and a substantial commission (some pay up to 40%) for every new member the broker sells their product to. This additional cost to the insurer may ultimately be passed on to its customers through higher premiums.

So the ‘free’ broker service is flawed: it doesn’t include everyone in the market and it eventually comes at a cost.

Choice is at the heart of a well-functioning, competitive market. The Australian Government website, privatehealth.gov.au was created to help you make an informed choice about private health insurance. It holds the latest cover and premium information about ALL health insurers and provides a user-friendly tool for you to compare funds.

It really is the best kept secret that brokers don’t want you to know about. You have the choice – and the detail – about different levels of cover, as well as a value rating of a fund’s general treatment benefits and limits.

Importantly, you can also compare not-for-profit ‘restricted access’ funds that are rarely examined by brokers. Because they don’t have shareholders, not-for-profit funds tend to return more for members. You’d be surprised how many people don’t realise they’re eligible to join one of these funds.

Comparing apples with apples is easy at privatehealth.gov.au – you can also compare a fund’s financial performance data, level of complaints to the Ombudsman and member retention against industry averages.

The power of choice is in your hands.

Category: Your Insurance

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Article by: Defence Health