Private Health Insurance in Australia
Australia has one of the best and comprehensive public healthcare systems in the world - A recent study ranked Medicare (Australia's public healthcare system) second after the Dutch healthcare system in terms of benefits and coverage it offers to residents.
However, like almost any other nation, residents do have the option of taking out private health insurance in addition to mandatory Medicare benefits in order to reap some additional coverage which is not covered under Medicare. Additionally, private health insurance can be tailored to suit individual needs - one can cover themselves for either just a ride on an ambulance to hospital, or just admittance to a private hospital or merge a few components and take out 'hospital and extras' cover. Regardless of what level of health insurance you take out, there're advantages of doing so including tax benefits past the age of 31.
Why's Medicare Not Enough?
Let's look at what Medicare offers and how it is different from what's covered on a private-health insurance policy:
1) Medicare only covers you for treatment at a public hospital and does not give the option of choosing your own doctor. In addition, Medicare does not allow you to choose which hospital you'd like to go to. A private hospital cover allows you to choose a doctor of your own choice and also lets you select the hospital he or she attends (whether it is public or private).
2) There's a common misconception that Medicare covers ambulance - this is not true! An ambulance can cost anywhere between $500.00 to $700.00 per trip and is usually an out of pocket expense. You can cover the cost of a ride on an ambulance with cheap private health insurance (by way of only covering yourself for one annual trip). Prices for this type of cover can vary, but based on my limited research, HCF can cover you for an ambulance ride for $30.00 per year.
3) While Medicare allows you to be treated as a public patient even if you may have private hospital cover, it almost always never gives you a private room. Under private health insurance, you can choose to be treated in a private room in a hospital of your choice (subject to availability) and Medicare would usually reimburse you 75% of all costs - These costs however do not include any theatre and private patient fees, pharmacutical/drug consultations, prosthesis or even treatment required within an ICU (Intensive Care Unit).
4) Depending on your private health insurance policy, you might be eligible to redeem costs incurred for hospital or specialist treatments overseas. While Medicare does have recirpocal arrangements with a few countries (including the UK, Canada, France and New Zealand) for offering travellers urgent public medical care, this is not always guaranteed.
Different kinds of Private Health Cover
In Australia, health insurance providers usually provide 3 kinds of policies:
As the name suggests, this cover only covers you for a single trip each year on an ambulance trip. This cover is especially useful in states like New South Wales, Victoria and the Australian Capital Territory where Medicare does not subsidize ambulance travel. An ambulance can cost anywhere between $500.00 and $700.00 in NSW, ACT and VIC and hence it makes sense to spare some change to cover yourself just in case. Ambulance-only health covers are fairly cheap and can cost anywhere between $20.00 to $40.00 per year.
Many health-insurance providers offer hospital-only private patient cover which includes ambulance-trips.
Hospital covers offer subscribers access to private patient cover and the choice of their own doctor with the option of adding some extras if they're willing to pay for it.
Due to the competetive nature among Australian Health insurance pricing, hospital covers can cost anywhere from $60.00 to $70.00. Prices can increase depending on inclusion of extras in the policy.
Hospital and Extras Cover
This cover is the most comprehensive of the three with health insurance holders having the option of choosing how many extras they're willing to pay for. Nor all extras are necessary. For example, a male would have absolutely no need for pregnancy and IVR related extras on their health insurance policy while a young and reasonably healthy individual might not feel the need to include psychiatric and optometrist related services on their policy. In other words, comprehensive policies can be tailored towards individual needs. While thorough research may lead you to finding some cheap comprehensive health insurance premiums, you should expect to pay anywhere between $80.00 to $100.00 each month on basic Hospital + Extras cover.
For example, HCF's basic Hospital + Extras cover costs roughly $76.00 per year for a 25 year old non-smoking single male.
Australian private health insurance providers offer policies to individuals, couples and families - with substantial savings possible on the latter.
While Medicare does address most needs, taking out private health insurance is not a bad idea, especially considering that the Federal Government does offer a 30% rebate on premiums. Taking out private health insurance also reduces the Medicare Levy Surcharge liability (which is on top of the 1.5% Medicare Levy charged to all taxpayers across the country).
Taking out private health insurance also has other tax savings on the policy holder. For example, if an individual takes out private health insurance before July 1st following their 31st birthday, they'll be exempt from paying 'Lifetime Health Cover' loading which is a 20% loading on their premium and continue to go up as they get older (the maximum loading being 70%).
All in all, taking out private health insurance is not bad idea considering the benefit it offers and careful screening of various options and providers should offer a decent deal on finding some cheap health insurance which might just come handy when you least expect it.