Pros and Cons of Private Health Insurance in Australia

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Written by

Chris Quinn

Written by

Chris Quinn

General Manager

Chris is the General Manager of Health Deal, one of Australia's biggest health insurance comparison services. He has been with Health Deal since the very beginning. Started as.

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March 9, 2023

Health insurance is an important consideration for all Australians, as it can help cover the costs of in-hospital treatments along with a series of other out-of-hospital services such as dental, physio, optical and much more. However, before purchasing health insurance, it’s essential to understand the pros and cons associated with it. In this article, we’ll examine the pros and cons of health insurance in Australia to help you make an informed decision.

Pros of Private Health Insurance in Australia

  • Access to Private Hospitals

    One of the biggest advantages of having health insurance in Australia is access to private hospitals. With private health insurance, you have more control over your treatment and can choose your doctor, hospital, and the time of your appointment. You’ll also often gain access to a private room when you are admitted into a private hospital and stay overnight. Having your own space to recover when you’re at your weakest is a massive advantage compared to staying in a shared ward in a public hospital.

  • Reduced Wait Times

    Another significant benefit of having private health insurance is that it can help reduce waiting times for elective procedures. Waiting times for procedures in the public healthcare system can be lengthy, which can be frustrating for many Australians. With private health insurance, you can receive treatment faster and get back to your daily activities sooner. This can be particularly important for those who require elective surgeries such as joint replacements or cataract surgery.

  • Protect Against Large Medical Costs

    Health insurance also provides financial protection against the high cost of medical treatments and procedures in Australia. Little things like going to the dentist can cost Aussies hundreds of dollars in 2023. Health insurance can help cover some, if not all of these costs. Trips to the dentist, physio, chiro etc can add up massively over time, and having a health fund with you to help cover some of these costs can offer great financial relief.

  • Private Health Insurance Rebate & Medicare Levy

    Additionally, most Australians who purchase private health insurance will be eligible for the private health insurance rebate. This means that you can claim a rebate when you lodge your tax return by having private health insurance or instead receive an on-going discount on your monthly premium. This can be a significant advantage, particularly for those who are looking to save money on their healthcare expenses.

    If you earn above a certain income threshold and do not have private hospital cover, you will be required to pay the Medicare Levy Surcharge, which is an additional tax that is designed to encourage higher earners to take out private health insurance. The Medicare Levy Surcharge is calculated based on your income and ranges from 1% to 1.5% of your taxable income. With a private health insurance plan, you can avoid the Medicare Levy Surcharge while also benefiting from more comprehensive cover.

Cons of Private Health Insurance in Australia

  • Cost

    One of the most significant disadvantages of having health insurance in Australia is the cost. Private health insurance premiums have risen dramatically over the past 10-15 years. For many Australians, this is the biggest barrier to obtaining private health insurance cover.

    The cost of private health insurance is driven by several factors, including your level of coverage, your home state (Eastern Seaboard states generally pay more for their cover) and your government rebate level, which is dependent on your age and income.

    In general, the more comprehensive the coverage, the higher the premiums will be. Your level of excess will also change your premium price, with a lower the excess equating to a higher premium

  • Coverage Limitations

    Another disadvantage of private health insurance in Australia is the limited coverage that policies provide. While private health insurance can cover many medical treatments and procedures, not all are covered. Private hospital policies in Australia will generally only cover you for medically necessary procedures with a Medicare Item Number. This means that if you require experimental treatment (which Medicare doesn’t cover), your private health fund will generally not cover the treatment

  • Waiting Periods

    Health insurance policies also often have waiting periods for certain treatments and procedures. This means that you may have to wait a certain period of time before you're eligible for coverage. Waiting periods can be frustrating for many Australians, particularly if they need urgent medical treatment.

    The standard wait periods for hospital coverage is two months for any new conditions, and 12 months for anything deemed pre-existing. Pregnancy, assisted reproductive services and weight loss surgery will always carry a 12-month wait period. Fortunately, however, once you have served your wait periods for a procedure, you won’t have to re-serve it if you switch from one health fund to another.

  • Complexity

    Finally, private health insurance policies can be complex and difficult to understand. This complexity can make it challenging to choose the right policy for your needs and to know exactly what's covered. Many Australians find it difficult to navigate the different policies and coverage options available, which can make it challenging to make an informed decision.

While there are numerous pros and cons of private health insurance in Australia, for many Australians, private health insurance can be immensely beneficial. If you are considering purchasing health insurance in Australia, it’s essential to choose the right policy that meets your unique needs and budget. With so many different policies available, it can be challenging to compare and evaluate them all.

This is where Health Deal can help. Health Deal is a leading health insurance comparison site in Australia that allows you to compare policies from a range of different providers. With Health Deal, you can quickly and easily compare policies, including coverage details, premiums, and waiting periods, so you can make an informed decision about your healthcare coverage.

Health Deal’s user-friendly service makes it easy to navigate and understand, even if you are new to the world of health insurance. By using Health Deal, you can save time and money by finding the right policy for you in just a few minutes.

In conclusion, if you’re looking for a better health insurance policy in Australia, Health Deal is the ideal resource for you. So why wait? Use Health Deal today to compare, switch and save!

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Written by

Chris Quinn

General Manager

Chris is the General Manager of Health Deal, one of Australia's biggest health insurance comparison services. He has been with Health Deal since the very beginning. Started as a sales agent and made the first ever sale for Health Deal, Chris has worked his way up to General Manager in 2020. He's seen it all through team leadership and campaign management.

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