Understanding the language of health insurance

If it's your first time investigating health insurance, you may not be familiar with some – or many – of the terms insurers use. Don’t worry, you’re not alone.

We want to make health insurance easier to understand

Our research found that our customers hold ‘good communication’ as the most important quality of an insurer. So in the spirit of communicating clearly, we’re going to demystify the language of health insurance.

When you shop around for health insurance, you’ll see some common terms. You’ll be comparing different policies, reviewing exclusions and choosing a level of excess.

What’s a policy?

A policy is the product that you ‘purchase’ from an insurer. These policies, in conjunction with your membership certificate, set out the details of the agreement between you and the insurer. It outlines what you are covered for and for how much. When it comes time for a claim, this policy determines if and how payment should be made to you.

You must always read your insurance policy carefully so you understand what you’re covered for – your insurer can help guide you through understanding your policy. At Accuro, we the time to help our members understand what they are buying.

What about pre-existing conditions?

The purpose of insurance is to protect you from the unknown, so you can expect any medical conditions that you are aware of to be excluded from your policy by the underwriter. Pre-existing conditions relate to a health sign, symptom, condition, or event experienced before you buy a policy. This doesn’t mean pre-existing conditions won’t be covered, Accuro applies exclusions for a set period of time for some conditions, but you must be upfront and honest with your insurer or your policy could be cancelled or your claim declined. The insurer needs to understand the likelihood of certain medical events happening in the future when assessing an application for cover. This process is called underwriting.

Not sure what you need to disclose? Give your insurer a call to be safe.

What are exclusions?

For health insurance, Exclusions are treatments, procedures or other benefits that you cannot claim for under your policy. We split these into two categories: general (not covered for anyone) and personal (based on your own medical history, including pre-existing conditions). Learn more about exclusions on our Understanding Health Insurance page.

It’s essential to read your policy and membership certificate to understand your exclusions. If you need some help finding out what they are, get in touch with your insurer before you purchase.

What’s a claim?

A health insurance claim is a formal request made to your insurer to cover or contribute to the cost of treatment either before you receive it or after as reimbursement. The claim process usually requires you to supply GP referrals, specialist recommendations, medical records and any other information necessary to ascertain whether the treatment is covered by your policy.

Claims for health insurance differ slightly from other insurance products. Often in the claims process you’ll engage the insurer before any treatment takes place. This is known as getting ‘pre-approval’, which is necessary for treatment over $1,000 or that requires going to hospital. Otherwise, you’ll can make a claim after the treatment.

It’s recommended to get pre-approval if you’re in doubt about whether your policy covers a particular treatment so that you know for certain beforehand if you will be covered. Alternatively, you can always give your insurer a call.

When buying a policy, claims are often the most important aspect to understand. Our research showed us that easy claiming was a very high priority for our members. We have a dedicated guide to Claims.

What’s a premium?

A premium is the ‘cost’ to keep your health insurance policy active. It’s paid on an ongoing basis at a set frequency.

It’s important to know that your premium will generally increase each year. This is because of factors such as the increasing age of members on the policy, the rising claim costs that come with advancements in medical procedures, technology and treatments, and the addition of new benefits to your policy. There are things that you can do to change your premium such as taking out an excess (see below) or adding and removing additional plans.

If you believe there’s an issue with the amount of premium you’re paying, talk to your insurer to see if your policy is right for your needs and if there are changes that could be made to your cover. The last thing you want to do is get behind with your premiums, which will disrupt your cover and could cause issues when you need to make a claim.

And excess?

An excess is the amount you agree to pay toward your healthcare when you make a claim. Excesses are often scalable at the time you set your policy up – the higher the excess you’ve agreed to pay, the lower your regular premiums will be. Consider your own financial position and compare higher regular premiums against the lump-sum cost of excess at the time of a claim. It’s important to note that you can easily increase your excess but to lower it, you will need to be underwritten again and may not be able to claim for some conditions as they may become exclusions.

Take the time to understand your health insurance

Want to know more? We’ve created a handy reference guide on our website called Understanding Health Insurance. We recommend you take a bit of time to understand this before making a decision for your own, your family’s, or your employees’ health insurance.

Further Reading

Understanding Health Insurance - Accuro’s own resource

Paying for healthcare services - MBIE’s resource for paying for healthcare, including medical insurance costs.

What is health insurance excess - Canstar’s resource for explaining an excess for health insurance.