Australians enjoy one of the world’s finest and most enviable public healthcare systems – yet despite that, there is a demand for private health insurance in Australia. Historically, nearly half of Australians have maintained private health cover. In the recent past, as an economic downturn has gripped the country in the wake of COVID-19, these numbers have dropped; but, for many Australians, private health insurance still remains a high priority purchase.
Why is that?
Overall, it’s because health insurance still has the potential to offer excellent value in exchange for the money consumers spend on it. Let’s take a look at 7 reasons you might want to consider investing in private health insurance:
1. Avoid Going Into Shock Over Your Next Ambulance Bill
Many Australians mistakenly believe that Medicare covers the costs for emergency ambulance transport. For most Aussies, this is an incorrect and foolish assumption.
In Queensland and Tasmania, the state fully subsidises ambulance transport for its citizens; but elsewhere in Australia, ambulance rides are not only not free, they are relatively expensive.
In Victoria, a typical emergency ambulance ride costs $1,265 for Victorians in major metropolitan areas. But should one be unlucky enough to need emergency rotary air transport, that could cost as much as $26,852.
In NSW, where the government provides a 49% subsidy, an NSW ambulance trip can cost as much as $6,571. This is because there is a $3.62 per kilometre fee that is charged in addition to the minimum callout fee of $401. For patients in rural areas, this can really add up to a sizable bill.
Even if you’re young and generally healthy, ambulance cover may be worth considering if you habitually engage in sports such as surfing, cycling, rollerblading, boating, rock climbing or skiing. This is particularly true if you’re frequently sporting in the outback, far away from easily accessible medical assistance.
Ambulance cover is available separately or as part of more comprehensive health insurance policies. Even if you don’t think you need other types of private health cover, ambulance cover may offer you a reasonably good value for the peace of mind it provides.
2. Private Health Insurance May Provide Cover for Services and Medications That Medicare Does Not
Many Australians need healthcare products and services that Medicare does not fund. Eyeglasses, routine dental appointments and hearing aids are a few examples of things you cannot typically claim for through Medicare. Allied health services like physio, speech therapy and chiropractic services are not usually covered either, although there are exceptions; notably, if you have a chronic disease or condition, and your GP refers you to one of these specialists, it may be covered by Medicare. Otherwise, you will have to either claim for these through private health insurance or pay for them out of pocket.
These types of services are typically covered by health funds under policies known as “ancillary cover” or “extras cover” policies.
Another potential benefit of private health fund membership: Some health funds provide cover for medications that are not covered by the publicly funded Pharmaceutical Benefits Scheme (PBS). PBS does cover quite a few medications, but they do not cover all the meds your doctors might prescribe.
Not all private health insurance policies provide all of the above-mentioned benefits, so it is important to clearly understand the details and limitations of any policy that you are thinking of enrolling in.
3. It’s Possible to Claim More in Benefits Than You Pay in Premiums
There are Australians who get more than their money’s worth for the health insurance premiums they’re paying. For example, Jessica Irvine, writing on behalf of the Sydney Morning Herald, revealed that she did a recent review of her own private health cover. She discovered that last year, she paid only $234 in premiums for her extras cover, but she claimed $593 worth of benefits. Most people would agree that’s an outstanding value for the money.
4. Have a Say in Choosing Your Doctor and Hospital
As a public patient, you don’t have much control over your healthcare experience. If you need medical treatment, most likely the closest available public hospital will appoint a doctor to perform it.
If you want to see a particular doctor, or receive treatment at a particular hospital, you can accomplish this by seeking treatment through the private healthcare system.
5. Enjoy a Private Hospital Room
When you’re a patient in the public Medicare system, you’ll most likely share a room with other patients. It is quite unlikely that you’d be allocated a private room in the public system, although there is a small possibility of that, depending on the severity of your condition and the local availability of private rooms.
If you’d prefer to make your recovery in the comfort of a private hospital room, private healthcare is likelier to offer you the experience you want. If your private health insurance policy specifically covers private rooms, you will most likely be able to take advantage of that. The only caveat is that a private room has to actually be available at the time of your treatment in the hospital where you have chosen to have your procedure done.
6. For Some Australians, Private Health Insurances Reduces Tax Bills
High-income Australians have a choice. They can either pay the Medicare Levy Surcharge (MLS) of 1 to 1.5 per cent; or they can register for private patient hospital cover — in which case, the MLS can be avoided. Historically, the insurance providers have made policies available that are less expensive than the corresponding amount that the MLS would cost. This makes the private health insurance a comparative bargain.
7. During Normal Times, Shorter Wait Times Are Typical in the Private System
For many procedures, there are long wait times if you opt to receive your care through the public Medicare system. One of the usual selling points for private health insurance is being able to get faster treatment. However, in the wake of the COVID-19 crisis, the advantages temporarily might not be as significant as usual.
This is because, during the early days of the COVID-19 crisis, elective surgeries were postponed in hopes of making sufficient resources available for virus patients. Later, elective surgeries were allowed to resume; but they have been restricted again in Melbourne.
As a result of the decisions that were made, there is a massive backlog of both public and private patients who still need to have elective surgeries performed. The government has called on the private hospital system to help alleviate this burden.
Truly short wait times probably aren’t a realistic expectation for anyone until this backlog is cleared. As of August 2020, a best-case estimate is that it will take about a year for that to happen – and that’s only if there are no more forced shutdowns that create additional delays.
In any case, healthcare professionals are doing their best to perform triage so that the most urgent matters are being taken care of as soon as possible.
As you can see from the above 7 points, private health insurance does offer the possibility of considerable benefits.
The private healthcare system also provides Australian consumers with considerable numbers of choices for levels of cover and benefits. While it is fantastic to have such a broad variety of offerings available, the downside is that it can be confusing to choose a policy that will be suitable for your needs yet affordable enough to be a worthwhile investment. If you’d like help with navigating the complexities of the private health insurance system, check out the services offered at the Compare Health Insurance website. Their informational resources and insurance experts can introduce you to a private health insurance policy that precisely meets your needs — or, if you already have a policy, they can help you verify whether or not you’re indeed getting the best value for your money considering the level of cover you want to maintain.