Thankfully, Australia has a universal healthcare system, Medicare, which means we can access free care under the public system thanks to a 2% levy on our wages. This doesn’t, however, include most dental exams and treatment, most physiotherapy, occupational therapy, psychology services and more. For this reason and many others, almost half the population chooses to take out some form of health insurance to gain broader and, in some cases, faster access to care through private hospitals or as a private patient in a public hospital.

The pandemic may have brought health to the forefront of many people’s minds. If you’re considering health insurance, it may be useful to know the key reasons you might decide to sign up.

To improve wait times for surgery

With elective surgery in hospitals beginning to resume following COVID-19 restrictions, there are considerably longer-than-usual waiting lists. Health insurance could help with shortening some of those wait times resulting from cancellations or rescheduling.

As an example, government data shows that the average public wait for orthopaedic surgery is 76 days and can be more than 300 days in a public hospital.1 In a private hospital, you can generally get treated much sooner.

While insurance could shorten the wait for some services, it’s important to know that waiting times vary according to clinical urgency, so having cover may not always be beneficial in this sense.

To help with healthcare costs

The out of pocket costs of procedures that aren’t covered by Medicare, or where a patient chooses to be treated in a private hospital, can be more than your weekly or monthly budget will allow for.

In this way, health insurance can cover all or part of hospital procedures, which helps to keep health-related costs manageable in the short term. If you aren’t insured, accessing private hospital procedures can be very costly. For example, the average cost of a knee reconstruction is $8,135. If you have health insurance, the majority of this cost is generally covered.2

For specific services, always check what the waiting period is before you can claim. The length of the waiting period will often depend on the type of medical treatment you receive.

Health insurance with extras cover can also help with keeping up to date with dental and optical care. Without private health insurance, generally a visit to the dentist could end up being quite costly.

The ability to choose your specialist or preferred hospital

Under the public system, you may have little say in the surgeon or specialist who performs a treatment, the hospital and the timing of the procedure. Benefits of health insurance include the freedom of choice and more control.

To take advantage of the government initiatives which improve affordability

  • Medicare levy surcharge

The Medicare levy surcharge is designed to reduce demand on the public Medicare system. While most of us pay 2% of our taxable income (Medicare levy) as part of our tax each year, there’s an additional surcharge (Medicare levy surcharge) for those who earn above a certain threshold and don’t have private patient hospital cover. If you’re a high earner, it may work out cheaper to buy the insurance than pay the surcharge. Learn more about how the surcharge works.

  • Lifetime Health Cover (LHC) loading

The LHC loading is a government initiative to encourage young Australians to get health insurance before turning 30. From 1 July after your 31st birthday, if you do not have hospital cover, you will pay a 2% loading on top of your premium for every year you are aged over 30 (to a maximum of 70%) if you take out hospital cover. You only need basic hospital cover to avoid LHC loading. Use the online calculator to determine your LHC.

  • Private health insurance rebates

The private health insurance rebate is an amount the government contributes towards the cost of your health insurance premiums, depending on your income. The aim is to help make health insurance affordable. Find out if you’re eligible for the rebate.

If you do decide health insurance is for you, consider which cover best suits your budget and needs. There are many providers and options, so it will benefit you to do your research. 

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Source: Royal Australian College of Surgeons (RACS) and Medibank Private; surgical Variance Report 2017 – Orthopaedic Surgery

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