Why Get Private Health Insurance

How Health Insurance works

Health insurance is a type of insurance that helps cover the cost of doctor and hospital expenses when being admitted to hospital and treated as a private patient. Having health insurance can also provide you with other options when it comes to your health.

There are two main types of health insurance: hospital cover and extras cover. Hospital cover helps provide greater choice when it comes to going to hospital. Then there are extras cover for things like dental check-ups, optical items including prescription glasses or contact lenses, physiotherapy, and other health services outside of hospital.

Some people choose to take out hospital cover alone, others consider only extras, while many take out combined hospital with extras policies.

Whatever type of policy you choose, the key benefit is support – to better look after your health, whether in hospital or out in the community.

Why do I need Private Health Insurance

With access to Medicare for Australians, many people looking to take out private health cover for the first time ask this very question. The reasons differ among almost half of the population who are covered – here are some of the main ones.

1. More choice and control for your healthcare

   Do you like people fitting into your schedule? Private health cover gives you more choice and control if you need to go to hospital. You’ll be able to choose your doctor, preferred hospital and the timing of your procedure (subject to availability). You may also be able to request a private room. For instance, our arrangements with Members First hospitals mean that if you book a private room more than 24 hours before your admission and don’t receive one, you’ll get $50 back per night from the hospital^.

2. Avoid the wait on planned surgery

   You’re young and healthy, so don’t need health cover right? Unfortunately it doesn’t always work out that way. Something unexpected like needing to have your tonsils out could land you on a public hospital waiting list for months – or a hefty fee in a private hospital if you’re not insured.

   The real difference between the public and private health systems is mostly seen when you go to hospital for an elective procedure. That’s surgery which is planned for in advance and not considered as an emergency.

   For hospital procedures which are not a medical emergency, the wait can be lengthy – sometimes over a year. This can vary by treatment and the state you live in. In 2016-2017 public patients had higher average waiting times for all of the 25 most common intended procedures when compared to private health insurance funded patients. For example, knee replacements had an average 211 days to wait for surgery, with a number of patients waiting over a year.

   The average wait time for planned surgery for public patients also varied by states, with 32 days for Northern Territory to 60 days in NSW.

3. Cover beyond Medicare

   Regular trips to dentist and physio can add up. That’s where extras cover (also known as ancillary cover) can help. Depending on the type of extras cover you choose, after you serve your waiting periods you’ll be able to claim money back for a range of health services that may not be covered by Medicare - like dental, physio and optical - up to your yearly cover limits. Some of the more comprehensive covers will include a wide range of services like remedial massage, acupuncture, health aids and appliances and dietitian consultations.

4. Save money with health cover

   Depending on your age and income, there are several ways having health insurance can help save you money. For starters, if you take out hospital cover before July 1st following your 31st birthday, you can avoid paying the Australian Government’s Lifetime Health Cover (LHC) loading. For each year you delay, you could pay an additional 2% for hospital cover - up to a maximum of 70%. This extra cost will remain in place for 10 continuous years.

   There’s also the Government’s Medicare Levy Surcharge (MLS). To help fund healthcare, most Australian residents pay a Medicare Levy of 2% of their taxable income. In addition to this, if you earn over $90,000 (singles), or over $180,000 (couples/ families) and don’t have appropriate hospital cover, you may have to pay an extra 1-1.5% tax - known as the MLS.

5. Money back in your pocket

   The Government may contribute an amount (known as a 'rebate') towards the cost of your private health insurance premium. The rebate amount is based on your age and income. For instance, singles under 65 who earn $90k or less will receive a rebate of 24.608%*. The rebate is quick and easy to claim – you can choose to get it as a reduced premium or as a lump sum at tax time.

   Those aged 18-29 years of age may also be eligible for an Age-Based Discount on their hospital cover.

How do I choose Private Health Insurance?

Deciding whether health insurance is a good investment for you or your family is an important decision. Also, having insurance could give you greater peace of mind, but how do you know which is the right one for you?

Navigating the different types of cover and various health funds can seem tricky but, like anything else in life, seeking information and advice can help.

There are also comparison websites which may seem useful. However, be aware that they do not always present all available options and some for-profit comparison companies have incentives to sell you cover that may not be right for you or your family.

Compare Bupa covers online