Health insurance isn’t an area of our expertise so we partnered with Jessie Petterd, a spokeswoman for iSelect for this piece. Personally, I (Kylie of The Thrifty Issue) always viewed health insurance as important because I have used it so many times. Without it, my health would have suffered and my recovery from paralysis and multiple surgeries taken years longer. Here’s Jessie’s article for you.
If you have private health insurance, you’d be no stranger to the increasing cost of premiums and by now you’ve probably considered on a few occasions whether or not it’s really worth the money.
With yet another premium rate rise looming on April 1st, it’s a common question on the minds of many Australians: ‘should I ditch my private cover?’
It’s certainly frustrating paying for something that you may not necessarily see a return for in the short term, especially when you’re fit and healthy and can’t see yourself or your family being admitted to hospital any time soon. So rather than begrudgingly paying your premiums each month, why not put aside some time to weigh up whether private health insurance really suits your budget and lifestyle.
Benefits of Private Health Insurance
If you and your family are often visiting the physio, having regular dental check-ups or perhaps some of you wear glasses or contacts then you’d know that those costs can add up over time. This is where Extras cover can help lessen the blow. Extras cover can pay you benefits for some treatments not covered by Medicare such as physio, optical and dental.
Choice of Doctor and Hospital
As a private patient, you have the luxury of choosing your own specialist should you require a medical procedure or treatment. For example, if your family is still growing and you have Gold hospital cover, you’ll have the reassurance of choosing an obstetrician recommended to you.
The same goes for choosing your own hospital and the ability to be admitted as a private patient. You may like to be treated in a hospital close to home or one that you know has a great reputation.
Avoid Paying the Medicare Levy Surcharge
The Medicare Levy Surcharge (MLS) is designed to encourage more people to take out private health insurance to reduce the strain on the public health system. If you earn over $90,000 a year ($180,000 as a couple or family) and don’t have private hospital cover, you will be slugged with at least 1% (up to 1.5%) of your taxable income in additional tax.
Shorter Waiting Times for Elective Surgery
Even if your family is generally fit and healthy, there are times where one of you may require non-urgent elective surgery for something such as the removal of wisdom teeth for the kids in hospital or a knee replacement due to a sporting injury.
If you don’t have hospital cover, you could be waiting much longer for treatment in the public system. As a private patient, your doctor should be able to treat you quicker and get you back to work or the kids back to school sooner.
Drawbacks of Private Health Insurance
There’s no doubting that the cost of health insurance premiums can be hard to swallow and depending on your type of cover you could be paying thousands of dollars a year. Premiums have risen by an average of around 61% in past decade, including another rise this April by an average of 2.92%.
If premiums are burning a hole in your budget, you might like to consider reviewing your policy to see if you could find better value. There are comparison services out there like iSelect who can help you compare your options and find you a policy that suits your lifestyle and your budget.*
Out of Pocket Costs
While having private cover can protect you from a lot of costs, sometimes depending on your level of cover, you can be left with out of pocket costs for treatments and procedures. This is what’s referred to as the gap payment which occurs when the cost of medical treatment is more than what you get back from Medicare or your health insurer.
It Can Be Confusing
Private health insurance policies and products can be quite complex to understand. With inclusions and exclusions, the new Gold, Silver, Bronze and Basic categories, excesses and gaps it can seem much easier to put health insurance the ‘too hard basket’. If you are feeling overwhelmed by private health insurance, consider speaking to your health insurer or a comparison site to help you better understand your options.
With constant increasing pressures on the household budget, it can often be hard to justify the cost of private health insurance. On the other hand, you may find that the benefits and peace of mind offered from private cover for you and your family is worth it in the end.
Whatever you decide, before ditching your cover make sure you take the time check to see if you could find a different policy that still provides you with a suitable level of cover but is kinder on your bank balance.
*iSelect does not compare all health insurance providers or policies in the market. The availability of policies will change from time to time. Not all policies available from its providers are compared by iSelect and due to commercial arrangements, your stated needs and circumstances, not all policies compared by iSelect are available to all customers. Some policies and special offers are available only from iSelect’s contact centre or website. Click here to view iSelect’s range of providers
 Source: health.gov.au – industry weighted average premium increases by insurer by year.