Understanding Private Health Insurance in Australia
Private health insurance can be a complex topic, especially for Aussies looking to secure the best health care for their families for peace of mind.
From health insurance premiums to out-of-pocket expenses, to the different level of cover options and extras policies available, many Australians are left wondering if private health insurance really is worth the cost.
What is Private Health Insurance?
Basically, private health insurance covers costs that the public health system might not fully fund.
It typically includes three types of cover:
- Hospital cover
- Extras cover
- Combined hospital & extras cover
Australia’s public health system is one of the best in the world, so why pay extra for health insurance for your family? Let’s discuss.
Benefits of Family Private Health Insurance
There are plenty of incentives to take our family private health insurance, and depending on your life situation, some of these perks might strike a chord with you more than others.
No More Waiting in Line
A big advantage of private health insurance is you can bypass those long public waiting lists for certain hospital treatments, like elective surgeries.
Ever thought about how long you might wait for a knee replacement or shoulder surgery in a public hospital? Sometimes, waiting times can be years, and the worst part is you don’t get to pick your date or surgeon.
Private health insurance flips this around, giving you more say on when to schedule your surgery, who gets to perform it, and where you get to recover.
Another benefit is that your surgery date is usually set in stone. In public hospitals, you might get bumped down the list if someone more critical comes along. This is less likely to happen with private insurance because your doctor works in a private setting.
Pick Your Own Doctor
With private insurance, you get to choose the doctor or surgeon who’ll be doing your procedure. If you already have a trusted medical professional, this can ease pre-surgery nerves. In public hospitals, you get whoever is on duty that day.
Your Own Hospital Room
Who wants to share a hospital room with strangers when you’re not feeling your best? With private health insurance, you usually get to retreat to a private room after your treatment. Yes, it’s not always a 100% guarantee, but your chances are definitely higher than going public.
Give the Medicare Levy Surcharge a Miss
If your private health insurance has enough hospital cover, you can sidestep the Medicare Levy Surcharge.
While most Australians pay a 2% Medicare Levy on their taxable income, those earning over $90,000 individually or $180,000 for families might face an extra tax of 1%.
If you’re a higher earner, it’s often more pocket-friendly to go for private health insurance than to cough up the additional surcharge.
Federal Government Rebates & Incentives
In Australia, the Federal Government offers rebates and incentives to encourage individuals to take up private health insurance. These financial incentives are designed to make private health insurance more affordable for Australians and provide additional support for managing healthcare costs.
The rebate is income-tested, meaning the amount you receive depends on your income level and age. The rebate is generally higher for older individuals and decreases as income levels rise.
To be eligible for the private health insurance rebate, you must have an appropriate level of private hospital cover, extras cover, or a combination of both. The rebate can be claimed as a reduction in premiums paid to your private health insurer, or as a tax offset when you lodge your annual tax return.
All the Extras
There are a bunch of health services that Medicare won’t cover. For instance, while your annual eye checkup is covered, your new glasses aren’t. With private insurance, you can add things like pregnancy (obstetrics), physio, dental, and chiro to your hospital or extras cover, giving you access to popular health services that Medicare wouldn’t typically cover.
Hospital Cover Vs. Public Hospital
In a nutshell, private health insurance picks up the tab for hospital and medical costs not absorbed by Medicare. It usually comes in three types of coverage: hospital cover, general treatment (or extras) cover, and ambulance cover depending on where you live in Australia. You can also choose a policy that combines both hospital and extras cover.
Medicare, through the public system, covers some healthcare costs like GP visits either partially or fully. However, Medicare won’t touch some other healthcare costs, leaving you potentially staring at a massive medical bill without private health insurance.
For instance, hospital cover can be a lifesaver if you’re in for an extended hospital stay, particularly if you prefer the private hospital route. Without hospital cover, you could be left footing a hefty bill.
Meanwhile, extras cover comes to the rescue for health services like dental, optical, orthodontics, physiotherapy, and more. Your health insurer usually picks up some, if not all, of your costs for these services.
Private Health Insurance: Is it Worth it? for Your Family?
The answer largely depends on your individual and family health needs, financial situation, and what value you place on the potential benefits of private health insurance.
Factors such as:
- Quicker access to medical treatment;
- Choice of doctor;
- Private room during hospital stays;
- Coverage for services like physio, chiro and more can make private health insurance attractive.
However, it’s crucial to weigh these benefits against the potential out-of-pocket costs, waiting periods, and higher premiums that may come with private health insurance cover.
FAQs
What is lifetime health cover loading?
Lifetime Health Cover Loading (LHC) is an Australian Government initiative that encourages Aussies to take out hospital cover earlier in life and maintain it over time. If you get your hospital insurance before you turn 31, you can avoid the Lifetime Health Cover loading.
Who are some popular health insurance providers in Australia?
There are many health insurance providers or health funds in Australia, such as Bupa, Medibank, HCF
, NIB, and many smaller, regional, and non-profit funds. Each offers different health insurance policies, so it’s essential to compare them to find one that suits your needs.
What’s the difference between public and private patients in Australia?
A public patient is treated within the public health system and has no choice of doctor. In contrast, a private patient can choose their doctor and hospital, and often has shorter waiting times for elective surgeries.
Searching for the Best Health Insurance for Families? We Can Help!
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Simply use our free online tool below to get personalised health cover quotes from Australia’s leading health fund providers in minutes!