Why do I need private health insurance?

In Australia, the taxpayer-funded Medicare health system covers many medical, hospital and inpatient pharmaceutical costs. Under this system you can be treated for many services as a public patient in a public hospital by a qualified doctor or other health professional.

Medicare is a fantastic service. However, you may experience long waiting lists for doctors and surgeries. If you need elective rather than emergency surgery, this could extend to months, or even years.

Also, many forms of healthcare are limited or not covered in the public system, so you could face out-of-pocket expenses such as:

• Ambulance fees
• Chiropractic treatment
• Home nursing
• Podiatry
• Physiotherapy
• Occupational, speech and eye therapy
• ‘Complementary’ therapies such as acupuncture
• Glasses and contact lenses
• Dental care
• Certain pharmaceutical costs

What about the Medicare Levy Surcharge?

The Medicare Levy Surcharge (MLS) is levied on payers of Australian tax who do not have private hospital cover and who earn above a certain income. The surcharge aims to encourage individuals to take out private hospital cover and where possible, to use the private system to reduce the demand on the public Medicare system.

The MLS is income-tested and is levied between 1% to 1.5% of your income. This is on top of the 2% Medicare Levy you already pay as an Australian taxpayer. If you’re a high-income earner (above $93,000 annually, for singles) you can avoid the MLS by taking out appropriate private hospital cover.

There’s also the Lifetime Health Cover (LHC), which comes into effect following your 31st birthday. LHC is a Government initiative designed to encourage people to take out hospital insurance earlier in life and to maintain their cover. So, if you haven’t taken out appropriate private hospital cover before 1 July following your 31st birthday, you will be liable to pay an annual financial loading in addition to the base rate premium for private hospital cover. The loading is charged at 2% per year for someone who first took out hospital cover at age 31, and the maximum loading is 70%.

So, to sum it up, if you’re an Australian resident, aged 31 or over, earn more than $93,000 per year, and want control over your healthcare, you might think about getting health insurance.

But no matter what your age or life stage, the benefits of holding private health insurance still apply. 

Private health insurance doesn’t just protect older people or families. It offers peace of mind for every stage in your life.

If you are young, fit and healthy and not planning children just yet, you’re likely to feel a little adventurous. You might play sport once a week, putting pressure on your knees. You might cycle to work to get exercise. A basic health insurance package can offer benefits such as:

• Accident cover
• Joint reconstructions
• Hernia and appendix
• Dental surgery
• Ambulance cover
• Alternative therapies like acupuncture or remedial massage

Starting a family is one of the most important stages in life, and it’s crucial that you feel protected and safe during this time. With private health insurance you can expect benefits such as:

• Pregnancy and birth
• Assisted reproductive services
• Heart and vascular system
• General and major dental
• Ambulance and accident cover

There’s no way to predict when you or your children might become sick or suffer an injury, however there are certain measures you can take to help ease the stress of these situations. Private health insurance offers a financial safety net for serious, minor and everyday health issues, to take the pressure off caring for your family’s wellbeing. Climbing trees, riding bikes, playing in the rain - it’s all part of growing up, but it doesn’t come without risk. The right family cover could protect you from out-of-pocket expenses if your child is admitted to hospital, and also covers:

• Accident cover
• Ambulance cover
• Bone, joint and muscle
• Tonsils, adenoids and grommets
• Hernia and appendix
• Dental services

The kids have grown up, they’ve moved out of home, and you’re back to taking care of just yourself and your partner. The closer you get to retirement, the higher your risk of heart disease, eye surgery, and the need to treat other serious conditions. You need to be prepared. Benefits you can expect from private health cover include:

• Dental surgery
• Chemotherapy, radiotherapy and immunotherapy for cancer
• Gastrointestinal endoscopy
• Gynaecology
• Heart and vascular system
• Hernia and appendix
• Joint reconstructions
• Weight loss surgery
• Mental health services

As a retiree you may feel like private health insurance is a pinch on your finances that you don’t need, but this is the time of your life when you need to protect your health the most. As a retiree, the risk of suffering a serious illness or accident is higher, and it’s important you get the care you need as soon as you need it. And, despite your health risks being higher, if you were born before the 1st of July 1934, you’re exempt from Lifetime Health Cover age loading, meaning you’ll pay the same premium as someone aged 30. If you were born later than this date, the good news is you could be entitled to a rebate from the Government, which means money back on your health insurance premium.

Benefits you can expect include:

• Back, neck and spine surgery
• Ambulance cover
• Accident cover
• Chemotherapy, radiotherapy and immunotherapy for cancer
• Gastrointestinal endoscopy
• Optical services
• Physiotherapy
• Health aids
• Pharmaceutical
• Hearing aids
• Palliative care