| Transfer
Medical Risk
A Sponsor may choose to transfer medical and
hospital and risk using a health insurance policy underwritten
by a registered health benefits organisation.
The Sponsor can choose a partial
risk transfer or total
risk transfer to a health fund policy. There is an important
difference between these two levels of risk transfer.
A partial risk
health fund policy has an aggregate limit, usually A$30,000
per person per annum.
Amounts over A$30,000 are payable by the Sponsor.
A partial
risk policy may also contain a major claim buyout clause e.g.
a once only benefit of A$5000. It is important to carefully
read the “fine print” in the policy wording.
The problem with the A$30,000 capped health fund
policy is when residual risk arises in the event of a serious claim.
For example, a premature birth often costs more than A$150,000.
The A$120,000 gap is a residual risk which must be met by the Sponsor.
A Sponsor can also transfer the total
risk to a health fund policy which does not place an upper
limit on medical or hospital claims. Two Australian policies offering total
risk transfer are Medibank Private and Australian Health Insurance,
underwritten by Australian Health Management.
Both Medibank Private and Australian Health Management are Registered
Health Benefits Organizations.
Warning:
Do not rely on transferring risk to an overseas travel policy.
With few
exceptions these only offer emergency cover, and the United
Kingdom policies expressly exclude any claim not admitted
under the Medicare Reciprocal Agreement. Often there is no
cover whilst the policyholder is working. These polices are
designed to provide only emergency cover whilst the policy
holder is actually travelling, and this is why they only cost
a fraction of health fund cover.
Overseas
travel policies have a sad history of bad debts, and most
hospitals require up-front payment from the employee or their
Sponsor. Recovering this money from an overseas insurer can
prove very difficult.
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