What are some of the key differences between public and private health insurance?

The benefits of taking out private health insurance go beyond saving you some money at tax time. Having health cover can save you in medical costs and reduce the amount of time you’ll have to wait for treatment. The question you really should ask yourself is, can you afford to be without health insurance?

 

You could save on tax

The implementation of the Medicare Levy Surcharge (MLS) by the Australian Government means singles earning over $90,000 a year ($180,000 for couples and families) without hospital cover on their private health insurance policy will be charged an additional 1% in tax, on top of the standard Medicare levy.

Earn over $105,000 ($210,000 for couples and families) and you’ll be charged 1.25%, and an income of over $140,000 ($280,000 for couples and families) will see you paying an extra 1.5% on tax.

Depending on your income, you may find by taking out private hospital cover you’ll end up saving money at tax time. The ATO won’t charge you the surcharge, and you’ll have private cover. It’s a win/win.

You can reduce waiting times for hospital treatment

Being a private patient means you’re likely to experience shorter waiting times for elective surgery like a knee operation. These are conditions that are considered non-life-threatening, but that doesn’t mean you won’t be experiencing pain or your lifestyle won’t be affected.

Being stuck on a public hospital waiting list can be frustrating. Private health insurance patients can avoid the long waits by being treated in private hospital, so you’re treated at a convenient time for you.

You can choose where you’re treated and who by

Choosing where you’re treated and who by is one of the great benefits of private health cover. Life can be made a whole lot easier if you’re admitted into a hospital closer to home or near your friends and family.

Depending on the type of policy and availability, you may even be able to stay in more luxury hospital accommodation and enjoy the benefits of your own room, a private bathroom, and even a TV.

Having continuous care from your chosen medical professional can also bring peace of mind you’re being treated by someone who knows your history best.

You may avoid Lifetime Health Cover loading charges

You may think as you’re young and healthy, health insurance isn’t for you. But if you don’t take out private hospital cover before 1st July following your 31st birthday, you’ll be hit with a loading fee when you take it out later in life. The Lifetime Health Cover scheme means if you take out hospital cover after this time you’ll need to pay a 2% loading fee on top of your annual premiums.

This fee will continue for every year you’re over 30 without cover. For example, if you’re 40 without health cover, you will be charged an extra 20% more on your premiums. That could total around $300 per year!

Find out more about the Lifetime Health Cover loading.

You may be able to claim for non-hospital treatment

Take up extras cover, and you’ll be able to claim for things like dental, physio, or optometry which may help reduce your out-of-pocket expenses.

Some extras policies will also cover visits you make to natural therapists like acupuncture, reflexology or naturopathy.

You may be covered for services you already use

Ever get a remedial massage? Do you go to a Pilates class?

Get private health cover and you may be able to claim on “lifestyle” services you already use. This is all part of health funds supporting its members in remaining healthy. After all, the healthier you are, the fewer claims providers have to pay out.

If you’re comparing policies, make sure you compare the services covered and any restrictions or waiting periods that may apply.

Being healthy and young is no guarantee that you won’t need medical treatment

So you work out, eat well and rarely get sick; you don’t need private health cover, right? Unfortunately, the statistics* illustrate being young and healthy is no guarantee that you won’t need medical treatment at some stage in the near future.

  • One out of every five people aged between 20 and 30 years old will be treated in hospital annually
  • One out of every four people aged between 30 and 40 years old will be treated in hospital annually
  • One out of every three people aged between 50 and 65 years old will be treated in hospital annually

The best way to determine whether private health insurance is right for you, is to compare some policies. You can do that now online, or speak to a Members Own consultant and we’ll do it for you. You may find the benefits are too good to ignore.

*Australian Institute of Health and Welfare (AIHW) 2010. Australian Hospital Statistics 2008-09