Do I need private health insurance?

How to decide whether you need private health insurance

When deciding whether you need private health insurance, consider the advantages and disadvantages to make the best decision for your situation.

If you buy Hospital Cover, the main benefit is that it helps you pay for the cost of being treated as a private patient in hospital. 

If you buy Extras Cover, the main benefit is that it helps you pay for healthcare services that Medicare does not cover.

For most Australians, the main barrier to purchasing private health insurance is the cost.

What are the benefits of Hospital Cover?

The benefits of Hospital Cover are:

• more flexibility when choosing the doctor that treats you 
• the type of treatment you receive 
• when and where you are treated.

Avoid lengthy waiting lists

In Australia, surgery is classified into 2 broad categories:

• emergency
• elective.

Emergency surgery is surgery to treat trauma or acute illness when you arrive at an emergency department.

Elective surgery is planned surgery that is booked in advance after a specialist clinical assessment. If your surgery is classified as elective, you are placed on an elective surgery waiting list.

One benefit of taking out Hospital Cover is avoiding lengthy waiting lists that public patients experience in public hospitals for procedures classified as elective surgery. Instead, you are admitted as a private patient.

Select the doctor of your choice

If you are admitted to a public hospital as a public patient, you cannot choose the doctor who treats you. Instead, the hospital allocates one to you.

If you have Hospital Cover and elect to be admitted to a public or private hospital as a private patient, you can select the doctor who treats you.

Select where you are treated

If you have private health insurance, you can work with your specialist to select the hospital where you will be treated. 

For example, you may choose to be treated as a private patient in a public hospital or a private patient in a private hospital. 

Have more say over your accommodation in hospital

If you have private health insurance and decide to use it, you have a better chance of getting a private room if one is available.

Get the Private Health Insurance Rebate

The Australian Government may pay you a rebate to help cover the cost of your private health insurance if:

• you take out Hospital Cover and/or Extras Cover and
• your income is below a certain level.

If you are under 30, take advantage of the Age-based Discount

If you are under 30, you can save on the cost of Hospital Cover by taking advantage of the Age-based Discount.

Although not all insurers offer the Age-based Discount, you can save up to 10% on your Hospital Cover each year until it phases out when you turn 41.

Pay less tax

If you buy Hospital Cover, you may be able to avoid paying the Medicare Levy Surcharge. This is a levy of up to 1.5% on taxable income for people who do not have private Hospital Cover and earn an income above a certain level.

Avoid paying more for Hospital Cover later in life

The Australian Government imposes a Lifetime Health Cover Loading on people who take out Hospital Cover after the age of 30. 

If you are over 31 and take out Hospital Cover for the first time, you may pay higher premiums for the next 10 years.

Avoid paying more and take out Hospital Cover before you turn 31 so you do not have to pay higher premiums later in life.

What are the benefits of Extras Cover?

If you have Extras Cover, you can reduce the cost of a range of treatments not subsidised by Medicare, such as:

• Chiropractic
• General Dental
• Optical
• Podiatry
• Physiotherapy.

Extras Cover works rather like a subscription service. You pay premiums and your health insurer covers part of the cost of treatments when you pay for them.

What are the benefits of Ambulance Cover?

Medicare does not cover the cost of ambulance services.

Some states and territories cover the cost of ambulance services. In others, you have to pay for ambulance transport. 

If you live in a state or territory where you have to pay for ambulance transport, you may want to take out Ambulance Cover.