What’s the deal with low medical insurance rebates?

Medical funds often give back low rebates — find out why this is the case.

Are you often confused by the rebate amount you receive when you make a claim with your medical insurer? If you have what is often known as ‘extras’ cover (your fund may officially call it either general or ancillary treatment cover), which includes services like dentistry, optometry and physiotherapy, you might find that it is not always clear why you receive the amount that you do when it comes to your rebates.

In most cases, medical funds don’t actually explain how the rebate figure is calculated.  We’ve put together some information to help you understand rebates and how they work. Here’s what you should know.

Don’t blame your dentist or other healthcare providers

There are a number of factors that shape your rebate amount, and although it might be tempting to blame your healthcare provider for the fact that you sometimes receive so little back, it is not actually up to the practitioner.

For a period of five years, from March 2012 to March 2017, average dental fees per service only rose by three percent, with dental fees overall just keeping up with the Consumer Price Index. On the other hand, while the average rebate fees paid out rose by around four percent, these were dwarfed by a staggering increase in premiums of 38 percent.

What this means, put simply, is that we are worse off than before, but not because of what our dentists charge. In fact, dentists have typically capped their fee increases well below those of the premium increases of most medical funds.

Not all policies are the same
There are a number of insurers that are trying to direct policy holders to use their own contracted dentists, often referred to as ‘preferred providers’.  The term, however, can be misleading because these healthcare providers are no more or less qualified than your own highly-skilled dentist of choice.

It can be tempting, however, to take guidance from your medical fund and use their recommended dentist, particularly if they offer you higher rebates to visit a particular practice. The problem though is that you are forced to leave your own dentist behind, and for many people, that is a major disadvantage. If you have been with your dentist for a while, you’ll know that it is comforting to receive care from a professional who knows your history, and who is familiar with the treatments that work best for you. It’s a very difficult decision to make — if you choose to stay with your own dentist, then you are effectively being discriminated against by your own fund.

Mind the gap
The next time you find yourself faced with a big difference between the fee you’ve paid to your dentist, and the rebate your fund has handed back to you, try and remember that your dentist is on your side. If your health insurer explains to you that you are getting back a certain amount of money solely because of the fees charged by your dentist, remember that the amount you receive back as a rebate is actually entirely at the discretion of your medical fund.

If you would like to take some action about this issue, it is possible to file a complaint with the Private Health Industry Ombudsman. You can also add your voice to the Time2Switch campaign (https://www.ada.org.au/time2switch/Home

), where we are working to restore balance to the relationship between patients like yourself, the dental profession and private health insurers.

If you have any questions about rebates, please don’t hesitate to get in touch. We also encourage you to take a look at the range of finance options that we offer.