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Debunking the top five myths around health insurance

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Health insurance can be difficult to navigate.

Not only is there a wealth of information and products, but there are also numerous myths and misconceptions floating around. This can make it difficult to separate fact from fiction.

To help you understand the ins and outs of health insurance, Finder has explained and debunked the top five health insurance myths.

health insurance myths debunked

Myth 1: You won't have any out-of-pocket medical expenses

Just because you have health insurance, this doesn't necessarily mean that you won't have to fork out for additional costs. You'll be charged an out-of-pocket expense or "gap payment" when a hospital or healthcare provider charges more for a service than what's covered by Medicare and your private health insurance.

Specialists often set their own fees, so make sure to ask about out-of-pocket payments upfront so you can budget accordingly.

Myth 2: Medicare covers the cost of an ambulance

While ambulance fees are covered by the state governments in Queensland and Tasmania (and for some holders of pension or concession cards), in most states you'll need to foot the bill yourself.

Ambulance fees differ across the states and territories as well. In Victoria, for example, a trip in an ambulance can cost up to $1,265 in metropolitan areas or $1866 in regional and rural areas; whereas, NSW residents will be charged $392 for a call-out and $3.54 per kilometre travelled.

With the potential to pay big bucks for a trip in an ambulance, it can be worth protecting yourself (and your bank balance) with ambulance cover.

Myth 3: Couple policies are cheaper

Sorry, love birds- a couple's health insurance policy is no cheaper than two single policies. In Australia, private health insurance is built on the principle of the "community rating", which means that insurers can't charge one person more than another for the same policy.

A couples policy also requires both you and your partner pay for the same level of protection. This means that if one of you is paying extra for pregnancy or obstetrics, the other will have to pay the same rate, regardless of whether they plan to get pregnant. Keep in mind any extras or benefits like dental, optical or physiotherapy are still restricted to "per person" limits as well.

Myth 4: You don't need to take out pregnancy cover until you're actually pregnant

False. You'll need to serve a waiting period of at least 12 months before you can receive pregnancy benefits.

If you're thinking of starting a family and want to go through the private system, start looking at policies before you plan to conceive.

Myth 5: You don't need to take out health insurance to avoid the Medicare Levy Surcharge

This depends. The Medicare Levy Surcharge (MLS) is an additional tax between 1% and 1.5% of your income. It takes effect once you're earning more than $90,000 a year and don't have hospital cover. If the MLS applies to you, the amount you'll need to pay will start at around $75 per month.

If you earn more than $90,000 per year, it could be worth taking out health cover so you don't have to fork out for the surcharge. To do so, you'd need to apply for private health insurance that offers private patient hospital cover, a maximum payable excess per year of $500 (for singles) and $1000 (for couples/families).

If you're ever unsure about your policy details, contact your health insurance provider and always read the fine print.

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Sophie Walsh is an insurance expert at Finder.
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