Why Do I Need Health Insurance?
People take out private health insurance for a number of reasons — to avoid the Medicare levy surcharge, to opt in to lifetime cover and save, or just to have the peace of mind that comes with circumventing public hospital waiting lists.
Choosing your preferred hospital, doctor or surgeon without waiting can be valuable, particularly for elective surgery.
Jump the waiting list
The general waiting period for an operation in a public hospital is usually two months plus but it can be a lot longer. In addition to this waiting period, operations are put in order of priority; meaning that you may need to wait two months for an operation, only to be told that it has been pushed back for another patient whose situation is more critical. Even scans such as MRIs have a waiting list.
Private health members enjoy a waiting period that is substantially less; usually no longer than a month, and can sometimes be immediate. Those with private health insurance also have the security of a ‘locked in date’, meaning that their operation will not be pushed back due to another patient’s needs.
Private hospital rooms
Another obvious benefit of private health insurance is the option of a private room. In a public hospital you are often placed in a room with four to six other people who are suffering various conditions. Private health members are able to request a private room, which is usually subject to availability.
Taking advantage of rebates
Many people opt-in to private health insurance policies to take advantage of health rebates that are not covered by Medicare. Without private health insurances, some services can be extremely expensive. Examples of common inclusions include dental, chiro, physio and optical extras.
Avoiding the Medicare Levy Surcharge
The Medicare Levy Surcharge was introduced to curb those with higher levels of income to take out private health insurance policies and take pressure off the public health system. If you’re income is over $90000 as a single, or $180000 as a couple, you may be subject to a surcharge of over 1% of your income. That’s at least $900 out of your pocket!
Taking out hospital cover an excess of $500 or less for individuals, or $1,000 or less for families/couples will get you pass the nasty surcharge.
Saving long-term on Lifetime Health Cover
Lifetime Health Cover (LHC) also encourages young people to purchase a private health insurance policy to ease the dependence on the public health system. A loading charge of 2% will be put on top of your private health insurance premium each year after you turn 30 years of age and are not a member of a private health fund.
For example, if you are 40 years old and have never taken out a private health insurance policy until now, your additional LHC loading would be an extra 20%! (2% x 10 years). This can only be removed once you have been covered by private health insurance over a 10 year period.
Select your doctor or surgeon
Finally, with private health insurance you can select your preferred doctor or surgeon to carry out an operation. However in a public hospital, your doctor will be the one on duty at the time of your operation.
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