It is that time of the year again where if you don't use it you lose it. For a vast majority of us who have private health insurance cover, the anniversary period of their health fund benefits coincides with the holiday period. Which for most of us, happens to coincide with the busiest period of the year preparing for festivities just around the corner buying presents for your near and dear and or even planning christmas lunch or dinner and holidays besides the much needed R&R. So most likely making the most of your private health insurance extras cover is possibly the last thing on your mind.

However if you do not use your cover you will lose all unused benefits of the year, in other words it's like saying goodbye to your benefits accruing or carrying forward to the following year which you could have benefited from resulting in a waste of your money and the higher costs when you need it next. This means you could be wasting hundreds if not thousands of dollars each year. If this is important for you and you want to find out more then head to your private health insurer and check your annual limits for each type of service that you have not accessed or used. Remember that it is based on your level of cover or you could ring up your health insurer and ask for a benefits statement which should itemise all that you used and the benefits paid by the insurer.

“Medibank’s chief customer officer David Koczkar said the December and January period was one of the peak times for members to make extras claims before their annual limit amounts reset.” - source dailytelegraph

Extras health needs like dental, optical etc are not covered by Medicare and has to be borne by the individual who has the need. This is where extras health insurance or newer alternative Xtras Health Plan comes in.

Most people buy extras health insurance for the “Peace of mind” of knowing that they have the cover when they need but often some discover that it is not the case.

Generally with most Private Health Insurance extras products sold by the big and the small players you are restricted to how much you have available for a particular service type eg dental, optical, physiotherapy and the like. In other words the health insurance company has set out what it will cover and how much of that it will cover based on your policy, taking away your basic ability to make a decision on how much and which service to use your funds. Now that's not all, there are other restrictions that can apply on top.

In the traditional sense of the word insurance, where one pays a fee to a company to cover the risk of increased costs when a need arises is not not how extras health cover offered by private health insurance companies work. It is works, more like a budgeting tool where you have some money for a small ongoing cost. Here is a candid statement from 2015

“In an extraordinarily candid assessment for a top bureaucrat, Private Health Insurance Administration Council CEO Shaun Gath told News Corp Australia extras cover was an “irrational” purchase for most people because the premium paid was more than the benefits derived.“In a world of fiscal purity that (buying extras insurance) probably doesn’t make sense,” Mr Gath said.” Source News Corp

Well there you go! This coming from someone who has experience within the industry. This begs the question doesn't it?

But, Why lose your money that you set aside of your health needs at the end of each year, when you can keep it.

So what are there alternatives and what could it be.

1. You take the risk or self insure

If you are the person with self discipline, not tempted by marketing which follows you around like your shadow and have done something like it before you may be the right candidate to consider doing it yourself as you could save on fees and charges that apply

2. Contribute to a dedicated health plan

A dedicated Health Savings Plan as the name suggests is a dedicated account for your health needs where you accumulate funds over time and pay for your health needs out of the account.

According to ME bank survey June 2018, more and more people are struggling to save and are dipping into the savings account for day to day living. This is consistent with official figures from the Bureau of Statistics (ABS) which revealed, in the March quarter, the household savings ratio fell to 2.1 per cent — its lowest rate since December 2007. This is reflected by

Dedicated Health Savings Account on the other hand is more than just a budgeting tool such accounts enable you to accumulate money for your health needs over time

Xtras Health Plan (www.xhp.health) or XHP, is a dedicated health savings account, where you accumulate funds for your health needs and what you don't use carries forward to the next year and so on creating a nest egg over time so you don't have nasty surprises of “Out of Pocket Expenses” if you have built up funds that cover your cost of care.

The risk though being that if you don't have sufficient balance in your account for the particular extras health needs then you will have an “Out of Pocket Expense” to cover the difference.

But realistically,when was the last time you need expensive treatment year on year, majority of times all that most people need is basic treatment.

One way to minimise the risk of “Out of Pocket expense” would be, Preventive health maintenance where you have a much better chance of eliminating nasty surprise of big bill and out of pocket expense.

Xtras Health Plan Savings Scheme is a managed investment scheme licensed by ASIC (AFSL 500574). It is an Australian company based in Queensland, designed to enable health and save money for its members. Dedicated nature of the account ensures that your funds are only used for your health needs as you need it. So you don't have to feel rushed at the end of the year to cram it all in to take advantage of the money you have been setting aside.

So imagine now, that unused money being available for you the next year. Where you already start with a balance in your account. Which could come in handy to cover a gap if there is one as you are more likely to have funds to cover your extras needs over time. Being a financial product you have total control of how the funds are used on a which service type. Enabling you to achieve your health objectives and save money at the same time.

With XHP you use it or Keep it.