What you need to know about Private Health Insurance

What does this price rise mean?

Private health insurance premiums will go up by an average of 4.84 per cent. A price hike happens at this time every year and this is actually the lowest rise we’ve had in a decade. From April 1, a single person will be up for an extra $2 per week for their cover and it will cost families an additional $4 each week. 

Why am I paying more?

 “Australia has one of the most rapidly ageing populations in the world and the cost of healthcare is increasing,” David Rankin, budgeting expert at Sort My Money, explains.
Providing insurance is costing insurers more so we have to foot some of that bill. All premium increases are assessed by an independent regulator to make sure they’re justified.

Is it still worth having?

“It comes down to how you want to find your piece of mind,” Rankin says. “If private health insurance is something you can afford and feel is important, then having it is the right choice. But if it will cause your finances to creak, perhaps only having basic hospital cover is best.”
Bessie Hassan, from independent comparison site finder.com.au promises, “If you’re prepared to do the homework, you can land a good health insurance deal”.

What are the major perks of health insurance?

Having hospital cover means you can choose to be treated as a private patient in either a public or private hospital, plus you can choose your own doctor.
“Often as a private patient you’ll have much shorter waiting times and sometimes you’ll skip the queue altogether,” Hassan explains.
Another benefit is the extras policies, which can cover you for some or all of the out-of-pocket expenses that come with visits to the dentist, physiotherapist, optometrist and even the massage therapist.

Which tools should I use to find a policy?

“Doing your own research is the best way to go,” Rankin says. “Call the funds. Talk to friends and family. Be wary of comparison websites that don’t give independent advice.”
The consumer website privatehealth.gov.au offers free and independent information on all things private health insurance, and boasts a database of all the policies available in Australia.

How can I lower the premium I pay?

“If you want to pay a slightly lower premium each month, you can increase your hospital excess or co-payments,” Hassan says. “That’s a save now, worry later approach.”
Your excess is the amount of money you agree to pay for a hospital stay as a private patient before health insurer benefits kick in.

Does having insurance reduce my tax?

Most Aussie taxpayers pay a Medicare Levy of 2 per cent of their taxable income. If you’re a single who earns more than $90,000 annually or in a couple that earns more than $180,000, you’ll also be up for the Medicare Levy Surcharge, which is between 1 and 1.5 per cent of your income. Private cover can exempt you from the surcharge, so if your fund’s fees are on par with the surcharge, it may be prudent to keep your cover as it’s money you’re paying anyway. Do your research.

Does it matter how old I am when I join?

“Yes,” Hassan says. “If you’re going to get private health insurance then you’re best to get it before you turn 31.”
If you take out private health insurance after you turn 31, you’ll have to pay the Lifetime Health Cover loading on your hospital policy. That’s 2 per cent on top of the premium for each year you are over 30. If you take it out at 40, you’ll pay an extra 20 per cent. If you’re 50, it’s 40 per cent. This loading applies for 10 years too.

Once I’ve found the right policy, my work is done, right?

Wrong.  As your needs change, so should the policies you pay for. “It’s important to review your policy every year so you can make sure it’s not only providing good value for money but also giving you cover for the things you need. You might find the same level of cover is available with another insurer for cheaper,” Hassan says.

More Information

Sourced from Body and Soul in Health Facts, Whitecoat Guides
07 Apr 2017

Sourced from
Body and Soul

07 Apr 2017
Health Facts, Whitecoat Guides

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