Australia’s health system primarily consists of the public Medicare program, but health insurance is available to cover certain hospital expenses, like psychiatric services and rehabilitation. Certain providers will offer extras like dental, optical, and physiotherapy.
If you want to add private health insurance coverage to your included Medicare benefits, there are a few essential things you should know about how Australia handles this service.
What Australians Should Know About Health Insurance
The Australian healthcare system can feel tricky to navigate if you’ve never purchased insurance yourself. The following points should clear up common insurance misconceptions.
1. What’s Covered Depends on the Insurer and Their Policy
Australian insurers will separate their inclusions between general treatment and medical services in hospitals. The most common inclusions are dental, optical, anaesthesia, consultant physicians, and psychiatrists. You also get the option to stay in a private hospital.
It’s essential to assess your healthcare needs and tailor your level of coverage for what you require now and in the future. Your family doctor can help you choose the right plan based on your pre-existing health conditions, out-of-pocket spending, medications, and lifestyle.
2. The Average Cost of Health Insurance Premiums is Rising
In Australia, health care premiums are rising at an alarming rate. The Australian Medical Association (AMA) found that the variation range across insurers can vary from 8% to 46%. The AMA is attempting to solve this problem, but Australians are unlikely to see a change soon.
The best way to save money on your health insurance is by comparing from a list of health funds. Australians can save hundreds per year by picking the right insurance provider and only paying for services they absolutely need. Be sure to reassess your policy yearly to save money.
3. You May be Subject to Surcharges and Incentives
The Medicare levy helps fund services provided through Medicare. For this reason, all citizens must pay a 2.0% levy on their taxable income, but if you make above a certain amount, you’ll receive an additional levy between 1.0%-1.5%, depending on your taxable income.
If you’re a wealthy Australian and purchase health insurance, you’ll waive the additional levy. Australia will also receive a rebate, either as a tax offset or through reduced premiums and Lifetime Health Cover (LHC), which helps young people avoid paying the LHC loading.
4. Health Insurance Doesn’t Cover the Whole Cost of Services
One big misconception about health insurance is that they’ll pay for the total cost of each medical service, but that’s hardly, if ever, the case. That doesn’t mean that health insurance doesn’t help cover most of your costs. In fact, most insurers will cover 80% of your services.
Most Australians have to extract four wisdom teeth in their lifetime, costing upwards of $2,322. With insurance that pays 80% of the cost, you’ll only pay $464.40 plus your premium. Buying health insurance can save you big time if you’re unable to build up a good amount for savings.
5. Private Hospitals Are Worth the Extra Monthly Fee
In Australia, there isn’t a big divide between the level of care you receive in a public or private hospital. However, private health insurance does give Australia\’s access to shorter wait times, a private room, cheap and/or free anaesthesia, and the ability to choose their own doctor/surgeon.
If you’re due for a routine surgery at a public hospital, you may stay on a waiting list for more than a year. However, most patients will only wait 48-57 days, but you can move yourself closer to the top of the waitlist by going to a private hospital and choosing an available surgeon.
