Good private health insurance shouldn’t cost an arm and a leg!

When all is said and done your health is paramount in life. But the harsh reality is that we all get sick from time to time. Most of us will undergo at least one or two big operations in our lifetime. And let’s face it, some of us are just accident-prone. While not everything requires a doctor or hospitalisation, it’s nice to know the help is there when you need it. Unfortunately, the public health system is far from perfect. Unless you have private health insurance you may have to wait much longer than you had expected to receive proper medical treatment. There is also at times a noticeable difference between the quality of health care offered at public hospitals and community health clinics and private hospitals and clinics.

Private health insurance covers you in the event of accident or illness, and because not everyone can afford it, there are often shorter waiting lists and more hospital beds available in the private sector. This is why private health insurance makes sense for most people. Fewer days away from home, work and the family means your life doesn’t need to be interrupted as long. And let’s not forget the pain and distress that sickness or injury can cause! -Much better to deal with this straight away. Expectant parents, even those who’ve never held private health insurance before, will usually take out a policy so as to provide a better standard of health care during this joyous but critical time.

 

 

Of course, private health insurance is good for more than just hospital cover. ‘Extras’, which can sometimes be taken out without hospital cover, often include general or major dental and othodontia, optical, physiotherapy and exercise physiology, chiropractic and osteopathy, natural therapies, pharmaceutical prescriptions as well as psychology cover. Every policy is different, so it is very important for you to do your homework and determine which policy is right for you. Some health insurance policies provide more benefits than others, some less. Indeed, most insurers have a ‘hospital only’ option, which means no extras.

Another benefit associated with private health insurance is that most policies will include ambulance cover. While each State/Territory is different as to whether or not you will be liable for the costs of being taken to hospital by ambulance, with some covering this by means of a levy and others requiring you to foot the bill, this is often a nice little inclusion that may save you the costs of ambulance membership (depending where you are) or even worse -hundreds (and sometimes thousands!) of dollars in ambulance fees (if you are not a member).

It really is important to ascertain what is going to be included and excluded from your policy. For example, a standard hospitals package might include assisted reproductive services and infertility investigations, but you may not be planning a family. Or it may include treatments and remedies for certain digestive disorders or joint replacements that you may be very unlikely to require given your health, age, lifestyle and level of activity. Consultation with your doctor is best. He or she may even alert you to particular areas of health that you ought to be insured for.

 

 

The big difficulty most of us have when taking out private health insurance is simply comparing all of the policies. To this end, many comparison companies have sprung up in recent years. Comparing policies allows you to make sure that you’re covered for what you need, and not covered for what you don’t. Sites like Finder.com.au are great for this. And many of them are free! Big insurers simply reward these sites for sending customers their way, but what you pay for your policy is sometimes no different than what you would if you were to contact the insurer directly. The benefit of using sites like this is that they are rich in information and do not require you to visit the website of each individual insurer. That’s a lot of time saved, and it often means you get the best deal!

Things to keep in mind:

Private health insurance takes a chunk out of your bill, but there’s usually a ‘gap’, or percentage of the bill, that you need to pay. You really need to read the policy thoroughly and ask as many questions of the insurer (or referring agent) as you can think of, so that you are satisfied with the product you are purchasing.

That said, health insurance really is good value for money. The superior quality of health care, reduced waiting times and especially the optional inclusion of a varity of extras that most of us need, such as chiro, physio, optical etc, really makes it worthwhile. Need a new pair of sunnies? Deep tissue massage? Aromatherapy? You’ll be pleased to know that some policies offer these ‘lifestyle extras’.

 

 

Be aware that a ‘waiting period’ will often apply, especially for hospital cover. This is usually 2 months, and sometimes 12 months if you’re being treated for a pre-existing condition. Extras often have their own individual waiting periods, but are more generous. This is why it’s important to take out private health insurance when you’re young!

Health insurance premiums increase with your age. From age 30, if you apply for private health insurance for the first time, you’re likely to experience a Lifetime Health Cover (LHC) loading surcharge of 2% for each year above the age of 30 that you have failed to take our health insurance in the past.

Then there’s the Medicare Levy surcharge. Another big reason to take out private health insurance, if you’re earning more than $93,000 pa. (singles) or your family income is more than $186,000 pa. (couples/families), is to avoid the Medicare Levy surchage of 1-1.5% of your taxable income (2023-24 thresholds). Quite often, it is cheaper to take out private health insurance than to pay the Medicare Levy surcharge, so this really is a ‘no-brainer’ for some.

Talk to your accountant about the tax benefits and implications of private health insurance. Talk to your doctor about your medical needs. Shop around, compare the insurance policies you like and then consider if there are any ‘no-claim bonuses’ or sweetners on offer. It’s your health and it does matter!

This web site is under construction. All site content is for general information purposes only and is not advice. Financial, tax and health advice should be sought from accredited and qualitified professionals.