Periods of Waiting

One surprise in moving to Australia has been the way that business practices are so different between countries. I mistakenly believed that in any competitive, "free-market" system, businesses would set up incentives and rules that would optimize choices for the customer. This was a rather naive belief, I now admit. For example, trying to make sense of the different mobile phone plans and broadband services here is a nightmare, especially as I ponder adding a data service when I finally (if ever) get an iPhone. There's even a website where people have serious discussions of all these plans. The absence of mortgages with fixed interest rates for the life of the loan is another mystery. Even paying the rent every two weeks is something new.

Another example of cultural differences in business practices is how health insurance works here. Sure, there is basic universal healthcare, which we have been using for the past year quite happily. But nearly everyone supplements this with private insurance. Depending on the plan, private insurance can include several extras, such as dental, eyeglasses, psychotherapy, etc., which are not normally included in the government coverage. In addition, with private health insurance one has more options for hospital and specialist care. After being here a year we finally got around to signing up for private health insurance last week. Interestingly, many of the extras that come with this new insurance require a waiting period of between 2 and 12 months, depending on the "extra." This is the time from when we started paying for the insurance to the time when we can actually make a claim for the service. Thus, there are several services that we will have to wait months to use.

In the booklet that accompanied our welcome kit, I found this explanation for the waiting period:

Before you can start claiming for hospital services, you must be in your chosen cover for a set period of time, (known as a Waiting Period). Customers can only claim benefits after they have served their waiting periods. This is necessary to keep health cover fair. Waiting periods protect existing customers who pay premiums to a fund over time, for when they might need health cover. If we didn't have waiting periods, people might join a fund to claim for a planned item and then leave.

That last sentence makes me wonder why this doesn't happen in the United States. That is, in the States there are no "Waiting Periods" (I think), so why doesn't this problem of people joining and dropping their coverage as soon as some procedure is completed exist there? I also like the middle sentence about "this is necessary to keep health cover fair." It captures the essence of many policies in Australia. There's a great emphasis on things being fair here that is best summed up by the belief in "a fair go" for everyone. (Here are a couple of interesting and contrasting takes on the Fair Go: here #1 and here #2). Perhaps it is this cultural value (one not widely shared in the U.S.) that underlies the Waiting Period. Then again, it doesn't explain why there are 15 variables to consider when choosing my mobile phone coverage.