What is Private Health Insurance?
Private health insurance protects you against unexpected costs associated with illness or medical treatment. You’ll be covered for all or part of certain medical expenses, depending on the level of cover you choose.
Policy types can vary, likewise the levels of cover you can purchase. It isn’t compulsory to have private health insurance, but there’s plenty of benefits which we’ll explore here. There’s lots of things to consider when choosing the private health insurance that suits your needs. Luckily, Billy Sumo is here to help you navigate the complex world of insurance. He might even save you a few dollars in the process!
Private Health Insurance Hospital Cover
Hospital cover helps take care of the costs associated with medical treatment in private hospitals. It can be extremely beneficial if you find yourself in hospital for any period of time. Hospital bills can run into the thousands of dollars. With private health insurance hospital cover, you may only need to pay a small excess for your stay.
As a general guide, most health insurance providers have four levels of cover:
Basic Hospital Cover: Receive treatment in a private hospital without being subject to public hospital waiting lists.
Bronze Hospital Cover: The same as basic cover, but you’ll get some added benefits. Each provider will offer slightly different inclusions such as choosing your preferred doctor/specialist. There are, however, minimum treatments that all insurers must offer.
Silver Hospital Cover: Everything from basic and bronze, but more included treatments.
Gold Hospital Cover: The best of the best – you should be covered for any medical expenses that Medicare covers.
Private Health Insurance Extras Cover
Private health insurance extras cover is an added benefit you can choose with your hospital cover. It covers smaller medical expenses not covered under your general hospital cover. Likewise to hospital cover, insurance providers will offer different levels of extras cover, and it will include items such as:
- Dental treatment
- Optical (such as glasses or contact lenses)
- Medical equipment/appliances
- Alternative and Natural therapies (acupuncture, naturopathy)
- Chiropractic treatment
- Pharmaceuticals not covered by the Pharmaceutical Benefits Scheme
- Gym memberships and other health programs
Check what’s covered before choosing a health insurance provider because some providers will cover more extras services than others. The amount of cover will also vary, so read carefully. Depending on your policy, you may be reimbursed for the whole cost of a service, or a percentage. There will also be annual limits on each service.
What is an Excess Payment?
The excess is a one-off payment if you need to make a claim on your private health insurance. You can choose the amount of excess when you purchase your insurance policy. If you select a high excess, your annual premium will be cheaper. In contrast, if you only want a low excess, you’ll find the annual premium is higher.
For example, you may need to have surgery that keeps you in hospital for 5 nights. If you have hospital cover with a $400 excess, you will only pay $400. Insurance covers the rest of your hospital bill.
Furthermore, excess payments don’t apply to extras claims.
Why Should I Get Private Health Insurance?
There’s a lot of reasons you should consider getting private health insurance. Above all, insurance provides peace of mind that you can get medical treatment when you need it, without an enormous expense. Let’s have a look at just a few of the reasons you should consider private health insurance.
Avoid Hospital Waiting Lists
If you need surgery, you’re probably experiencing pain or discomfort. Without private health insurance, you could end up on a long waiting list for public hospital treatment. With hospital cover, you can have your treatment at a private hospital as soon as possible depending on surgeon availability. So, don’t wait around and put up with pain!
Choose Your Medical Professionals
In the public health system, you very rarely get to choose the doctors and surgeons who treat you. While we all like to have confidence that doctors in the public system are more than capable, you may have a preferred doctor or surgeon you’d like to use. With private health insurance, you’ll have your choice of doctors and surgeons. Having peace of mind and feeling comfortable with your surgeon takes away a lot of stress.
Private Health Insurance Rebates
The Australian Government provides a rebate for people with private health insurance, based on their level of cover and their taxable income. The rebate can be received in two different ways:
- Directly from your insurance provider as a reduction in your premium.
- Through the Australian Tax Office as a rebate when you do your tax return.
Pay Less Tax
It’s not just the Private Health Insurance Rebate that can save you money. In Australia, all taxpayers earning over $90,000 per year are required to pay a Medicare Levy Surcharge (MLS) as part of their tax return. This money is essentially a contribution towards the public health system. Consequently, with private health insurance, you don’t have to pay the surcharge.
If you’ve had hospital cover for the whole previous financial year, you’ll pay no MLS. If you had hospital cover for only half the year, you’d pay half of the surcharge.
Get the Lowest Rate with Lifetime Health Cover
Lifetime Health Cover (LHC) loading is a Government initiative to encourage people to take out private hospital cover when they’re younger.
So, if you take out at least basic hospital cover before you turn 31, you’ll always just pay the best rate possible through your provider. For every year you wait after age 31, your premiums will increase by 2%. Hence, if you waited 10 years after age 31, you’d end up paying 20% more for your premium.
Am I Penalised for Switching Private Health Insurance Providers?
There is no penalty for switching private health insurance providers. Your Lifetime Health Cover (LHC) won’t be affected, and you won’t need to go through any waiting periods again.
The only time you may need to re-sit your waiting periods is if you are taking out a higher level of insurance. For example if your previous cover didn’t include heart surgery but your new one does, there may be a waiting period.
How Do I Find the Best Private Health Insurance?
Look no further! Billy Sumo may never have made it as a champion sumo wrestler, but he’s at the top of the game when it comes to helping Aussies save money. If you want to find the best deal for private health insurance from our panel of insurers, let Billy compare prices for you. It’s as easy as that!