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Private Health Insurance – Do You Really Need It?

Written by - Jacaranda Team

September 29, 2020● 8 minute read●

As if your rent, petrol, gym membership, groceries, holidays, bills, and social life weren’t all enough! Now you’ve got to pay for your own private health insurance? A lot of people would usually throw in the towel at even just the sight of the word. However, as much as we wish we were, we’re not invincible. There are inevitably going to be times when we need access to hospital care or medical extras. 

With all Aussies having access to public healthcare, private health insurance is something often overlooked because of the ongoing expense. Yet, just like any insurance, it’s there to protect you and your finances when things get tough. Naturally, every situation is different though. Much like the private vs public school debate, what’s right for you will depend on your personal situation. So, if you’re still unsure about private health cover, keep reading! In this guide, we’ll unpack some of the key things to know and explain why it might be a good investment for you.

Why would you get private health insurance?

Although Medicare gives all Aussies access to free or low-cost healthcare, private health insurance gives you more control over the medical treatments you receive and who administers those treatments. This is where it’s importance lies for many people. Some other benefits to consider include:

It gives you peace of mind

As we grow up, we start to realise that life is full of unexpected moments. This is why insurance exists in the first place. To cover you when you rear-end someone’s car, damage your laptop, or your home floods. The same applies to your health cover.

Private health insurance means you can rest easy knowing that if you ever bust your knee, need your wisdom teeth out, throw your back, or need to B-line it for the emergency room, you’re covered.

It saves you money in the long run

When it comes to paying for your private health insurance, many people only look at the initial monthly expense and think they’ll need a small loan to cover the cost. When you’re already struggling with your current bills, it can be difficult to look past this and at the bigger picture. Yet if you’re someone who needs regular treatments like physio, chiro, optical or cardiac, you will actually end up saving money every time you use any of the services. Not to mention, some of these are completely covered by your private health insurance. 

For the spring chickens among us, health care is also much cheaper before you turn 30. If you take out health cover after the 1st of July following your 31st birthday, you’ll likely pay about 2% more for each year you didn’t have private health insurance over the age of 30. Then as you get older, it becomes more expensive. So the sooner you’re covered, the better.

What if you don’t need these treatments?

If you’re someone who doesn’t need those types of ongoing treatments, then you may be thinking private health insurance is unnecessary. The good news is that you only pay for what you need! If you’re someone who doesn’t have any ongoing medical issues, you won’t have to include all of the extras in your health care plan. The only thing you really need to have covered is hospital care and ambulance cover (depending on where you live).

Types of private health cover

Ambulance cover

Ambulance cover is your most basic type of cover. It helps pay for the costs of emergency transport and medical care. In some states, ambulance cover is free, regardless of your health care plan. Not too sure about what’s covered in your state? Check out the list below.

• ACT – Healthcare concession card and pensioner concession card holders are entitled to free ambulance transport services. If you’re not eligible for a concession card, you will not be covered unless you have private health insurance.
• NSW – Healthcare concession card, pensioner concession card, and Commonwealth seniors health care card holders are entitled to free ambulance transport services.
• NT – Pensioner concession card and Commonwealth seniors health card holders are entitled to free ambulance transfers. If you’re not eligible, you will not be covered unless you have private health cover or a subscription through the state ambulance service
• QLD – Ambulance costs are covered by the state government
• SA – If you want ambulance cover you will need to purchase it from a private health fund or have a subscription through the state ambulance service.
• TAS – Ambulance costs are covered by the state government
• VIC – Pensioner concession car and healthcare card holders are entitled to free ambulance transfers. Otherwise, it will need to be purchased through a private health care fund or a subscription through the state ambulance service.
• WA – Aged pensioner concession holders may be entitled to free ambulance transfers. If you want cover otherwise you will need private health insurance or a subscription through the state ambulance service.

Generally, ambulance fees start around $350 and can go up to almost $6,000 plus a per kilometre rate for the total distance the ambulance has to travel from the hospital to your location and back to the hospital.

Hospital cover

Hospital cover helps offset the cost of staying in hospital if something were to happen to you. One plus side to hospital costs is that they are generally free to all Australian citizens and most permanent residents in Australia, as long as the patient visits a public hospital. Medicare will not cover private patient hospital costs, medical and hospital costs incurred overseas, or medical and hospital services which are not clinically necessary.

Public vs. private health care

Medicare

• You can be treated as a public patient in a public hospital by a doctor appointed by the hospital
• Your doctor is chosen for you
• You can’t choose when you are admitted to hospital, unless it is an emergency. Meaning, unless what you have is life-threatening, you will still face waitlists if surgery is needed.
• You are covered for: consultation fees for public doctors, tests and examinations by doctors needed to treat illnesses (e.g. pathology), eye tests, surgical procedures done in a public hospital, some surgical procedures performed by approved dentists, specific items under the cleft lip and palate scheme, the enhanced Primary Care Program and allied health services as part of the Chronic Disease Management Plan.
• Medicare does not cover the cost of emergency or other ambulance services (unless you live in TAS or Queensland)

Private healthcare

• You can choose to be treated as a private patient in either a public or private hospital
• You can choose your own doctor and you can decide when to be admitted, meaning you won’t have to face long wait lists for treatment as long as you are at a private hospital
• Private health insurance generally covers hospital accommodation, theatre fees, intensive care, drugs, dressings and other consumables, prosthesis, diagnostic tests, pharmaceuticals and any additional doctor’s fees
• You can also choose to be covered for most dental examinations and treatments, most physiotherapy, occupational therapy, speech therapy, eye therapy, chiropractic services, podiatry or psychology services. As well as, acupuncture, glasses and contact lenses, hearing aids and other appliances and home nursing.
• If you choose to, you can also be covered for a range of prescription medicines
• Private health insurance will also cover you for the cost of emergency and other ambulance services

You’re more willing to get the care you need

Another benefit of private health insurance is that it means that you may be more willing to seek medical treatment that isn’t covered under the public system. For example, you may need to get your wisdom teeth removed. However, this procedure is not covered by Medicare and generally costs between $200 and $400 per tooth, plus the cost of sedatives or general anesthesia. You could be looking at paying between $1,500 and $3,000.

Not all of us have that money just lying around. However, if you are a member of a private health insurance fund, you will be covered for that procedure. It’s important to remember the amount that you are covered will depend on your plan and the policies of your fund.

More benefit of private health insurance include:

• Avoid public hospital waiting lists and patient priority order
• Stay in a private hospital room
• Claim money back on non-Medicare health services
• Dental cover
• Select your doctor or surgeon
• Claim private health insurance rebate
• Avoid the Medicare Levy Surcharge
• Save long-term on Lifetime Health Cover

How to find cheap health insurance

Now for the hard part: finding a private health plan that suits your personal situation and needs. You could spend hours on the internet trying to research the best private health insurance. Or? You could jump onto a comparison site and have the hard work done for you. iSelect is generally the best site for insurance, including private health and life insurance. Your plan will generally vary depending on your age, gender, the number of people you’re wanting to be covered and your existing health care needs.

At the end of the day, we are not financial advisors. As a responsible financial institution, we encourage you to seek a professional opinion when comparing policies. So, make sure to do your research beyond this guide before you commit to anything.

About Jacaranda Finance

Jacaranda Finance is an online lender. We’ve helped thousands of Aussies across the country get access to the fast cash loans they need, regardless of their credit score. On our blog, we cover a wide range of helpful topics in and around the finance space. Head there to check out some more interesting reads, or get in touch to find out how we could help you!

Written by Jacaranda Team