Co-author: Will Jolly
If you’re in your early 20s and are no longer covered by your parents’ policy, health insurance can seem like just another expense getting between you and your social life. That said, having a high-quality policy in place that suits your needs can provide some valuable peace of mind for some.
And while young people may be less likely to incur out of pocket medical costs, there are other possible benefits to consider. Some people like knowing they will be covered if they hurt themselves or fall ill unexpectedly, or need a wisdom tooth (or several) removed. Others like the support that extras cover can provide in helping pay for services like dental, optical and physiotherapy.
However, it isn’t right for every young person and the pros and cons should be carefully weighed up to decide whether the possible benefits outweigh the cost.
According to the ABC, large numbers of young people are deciding against having health insurance, with 49,000 fewer Australians aged 20-39 holding a policy in July 2018, compared with the same time a year earlier.
With this in mind, we asked two of our younger team members here at Canstar to weigh in on whether they hold health insurance and the reasons behind their decision. One has a policy in place and thinks it is paying off for him, the other is perfectly comfortable living without health insurance.
The opinions below are solely those of the individuals and don’t constitute professional financial advice or reflect Canstar’s views. If you’re considering taking out health insurance for yourself, it is a good idea to conduct your own research and make the decision based on your own circumstances and requirements.
The case for
Will Jolly is 23 years old. He graduated from university in 2016, and has been working full-time for two years. He took out health insurance earlier this year in July.
I used to very much be in the ‘no health insurance’ camp. That was until a few months ago when I started experiencing excruciating pain in my mouth. Hello wisdom teeth!
The pain was so bad I could barely get through a day at work or sleep at night, and after desperately calling a dozen or so oral surgeons, I managed to book a date for surgery.
Hooray! The bad news was that it would cost me almost $4,000 all up.
Since I didn’t have health insurance (I hadn’t been covered since I was booted from my parents’ policy after graduating), this could have been a killer blow for me. Luckily, I had some emergency savings I was able to use. But it was still gut-wrenching to say goodbye to so much money.
Important 20-something life lesson: get ALL your wisdom teeth out while you're still covered by your parents' private health insurance
— Eloise Keating (@ellykeating) September 16, 2014
I’m well aware that health insurance isn’t cheap, but after this experience, I reassessed whether or not I needed it. Being a fit, healthy young lad, I do a lot of things that could increase my chance of injury – like playing sports, lifting 200 kilos at the gym, rescuing kittens from trees and so on.
So, I had a look at health insurance policies that offered a combination of affordable premiums and cover for all the things I considered necessary, like general dental, physio, knee and shoulder reconstruction (required due to heavy lifting/kitten rescuing…you get the idea).
Yes, health insurance can be expensive, but my recent experience drew me to the conclusion that it’s better to be safe than sorry. And with premiums rising by an average of 5.37% a year since 2011 (Department of Health), health insurance isn’t getting any cheaper, so I figured I might just have to suck it up.
I’m pretty happy with the policy I chose and the coverage it has, but I’ll review it in a year or so to see if I’m getting good value from it. If not, then I’ll look elsewhere.
If Will has got you thinking that taking out health insurance is worth a closer look, you can compare policies with Canstar based on your personal circumstances and requirements.
The table below displays a snapshot of 5-Star hospital policies on Canstar’s database, sorted by provider name (alphabetically). Please note the results are based on a young single male born in 1995 in NSW. Click here to compare more policies based on your circumstances.
The case against
James Hurwood is 21 years old. He graduated from university in 2018 and has been working full-time for two months. He doesn’t have health insurance. Below he explains why.
A couple of months ago I got a call from NIB telling me that because I’d graduated I was no longer covered under my parent’s health insurance policy, and subsequently asking me if I wanted to take my own policy out. I said ‘no thank you’ at the time without thinking too hard about it.
I was low on funds at the time and, more pressingly, I only had five or so minutes before I needed to be back at my desk – not the best time to be getting wrapped up on the phone buying health insurance.
Since then I’ve had plenty of time to consider that rather impulsive decision and I’ve only become more convinced that, at least for the time being, I’ll be alright without health insurance.
Is private health insurance value for money for young people? pic.twitter.com/ThYuaBEdIW
— News Breakfast (@BreakfastNews) January 18, 2017
I say that for a few reasons, but the main ones are my relatively blemish-free medical history, and the fact that I’d personally rather deal with occasional but necessary out-of-pocket expenses than pay the best part of $100 or more per month for a policy I may not end up needing.
I haven’t been to hospital in over a decade, I don’t have any pre-existing conditions or illnesses and the last even-vaguely-serious medical procedure I’ve needed was getting a wisdom tooth popped out. My then-dentist waived the out-of-pocket costs, but my out-of-pocket costs wouldn’t have been significant if she hadn’t.
Now don’t get me wrong, I’m entirely aware that I’ve been in a fortunate position up until now. I’ve spent the vast majority of my life covered by private health insurance, and I’ve never had any reason to use it. But now that it’s up to me to decide whether or not I need health insurance, I’m saying no.
At the end of the day I’m a young person that has just graduated from uni, with money-management skills that are usually pretty good, but can fly right out the window occasionally. Spending $100 a month for something I might not need is not particularly appealing, so for now I’ll stay uninsured and hope my three remaining wisdom teeth lie low.