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Fit? Young? Healthy? You might think you can get away without private health cover but dragging your feet when it comes to taking up health insurance could hurt your hip pocket down the track.
Why should I get private health insurance?
While all Australian citizens are covered by Medicare, seeing a doctor may still involve payment of a “gap fee” above the amount that Medicare will pay; private health insurance may step in to pay this fee. If you require hospitalisation, having private cover allows you to choose a private hospital, and to choose the own doctor that will treat you; it reduces the waiting time for elective surgery. Additionally, depending on your plan private health cover will pay for services not covered by Medicare, such as optical, dental, chiropractic, and some alternate therapies.
When should I get private health insurance?
How long will I be covered under my parents’ health policy?
If your family has private health insurance, you will be covered under their plan as a dependant until you are older than 21, but if you are an unmarried full-time student, you can register as a ‘student dependant’ until you are over 25. Additionally, even if you do not fit these criteria, many insurance firms offer to include children aged 21-25 in their parent’s policy for an additional fee that is much cheaper than purchasing a separate policy.
Can’t I wait till I’m older?
While young people are generally fit and healthy, illness and injury are by nature unpredictable; recent statistics gathered by the Australian Institute of Health and Welfare predict that every year one in five people aged 20-30 will need to be hospitalised. Although you may think health insurance to be too expensive, this may be a period of your life when you can least afford to pay the full costs of any medical treatment you may suddenly need.
Furthermore, the Government’s Lifetime Health Cover Initiative offers a real financial benefit for purchasing private health insurance with hospital cover while still young. If you join after you turn 31, your premiums will be two precent more expensive for every year after this age that you go without cover.
Choosing a health insurance plan
Many insurers offer health insurance plans tailored to the needs of young people, and these can range in price from $40-$100 per month depending on comprehensiveness of cover and the cost of excess (the amount of health care charges you must pay before your insurer will contribute the remainder).
Select a plan that is appropriate to both your health needs and life situation; make sure it covers you for illnesses and injuries that are common to your age group (such as surgical removal of wisdom teeth and appendicitis) and excludes or limits benefits paid for those that are not (such as hip and knee joint replacement).
Are there any other financial incentives for becoming privately insured?
Besides the Lifetime Health Cover Initiative mentioned above, other incentives include:
The Federal Government Rebate on Private Health Insurance
The Federal Government will contribute 30 percent of your private insurance premium. This rebate can be directly discounted by your health fund, collected from your local Medicare office, or claimed back on your tax return.
Medicare Levy Surcharge
Having private health insurance with an annual excess of under $500 for a single person and $1000 for a couple will exempt you from this surcharge, which imposes an additional one percent of income tax on singles earning more than $50,000 a year and couples and most families earning more than $100,000 a year.
Problems and queries
The Australian Government Private Health Insurance Ombudsman can investigate if you are concerned about a health insurance company, policy or any decisions made in relation to a health claim.
