Since Medicare is universally free for all Australian residents, the most common question asked is often, “is it worth getting private health insurance?” The answer to this question is solely based on your requirements and preferences.Deciding which one is best for you is a good way to ensure that you recieve the cover that is best for you. Let’s have a closer look at the pros and cons of each to assist you in making your decision.
Key facts
- Medicare is a free health insurance available to Australian citizens that offers access to health care at no cost or a lowered cost.
- Medicare does not cover most costs for private hospitals, medical services, and treatments.
- Private health insurance helps provide cover for private hospitals and specialised care that may not be covered by Medicare.
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What is Medicare?
Medicare is a free health insurance that was created to ensure that Australian residents would be able to access healthcare at no cost or at a lowered cost. The fund itself is funded by Australian tax payers who use 2% of their taxable income to help fund this health insurance.
To be apart of the Medicare programe, one simply needs to enrol. The disadvantages of medicare is although it covers a variety of medical services, it does not cover all. Some treatments and procedures that are not covered by medicare can be quite expensive. Medicare does not cover Private hospital costs such as accommodation, ambulance services, overseas medical treatment, and theatre fees.
What does it cover?
- Treatment received within a public hospital.
- Consultation fees for doctors and specialists.
- Pathology tests and X-rays.
- Eye tests performed by optometrists.
- Most prescription medication.
- Care for mental health.
What is Private Health Insurance?
Private health insurance ensures members receive comprehensive coverage for specific medical requirements that Medicare may not cover. Private health insurance typically covers three distinct areas: General treatment, ambulance, and hospital. Most private health insurers offer these cover types separately or combined.
Since Medicare provides cover for certain services, private health insurances cannot by law provide cover for: GP visits, any tests and diagnostic imaging that occurs out-of hospital, and in-room consultations with specialists.
The disadvantages of private health insurance may include:
- Additional monthly costs for coverage may be expensive.
- The health insurance provider will not cover the cost of treatment if it is not in the policy.
- Out-of-hospital expenses require additional coverage known as Extras cover.
- Does not provide cover for certain natural therapies.
- Policies need to be carefully understood to know what is and isn’t covered in the event of an emergency.
What does it cover?
- Fees and costs of private hospitals.
- Ambulance cover.
- Out-of-hospital expenses (Extras cover).
- Pregnancy and dental.
- Brain and nervous system.
- Diabetes management.
- Plastic reconstructive surgery.
- Rehabilitation.
- Gastrointestinal endoscopy.
- Dialysis for chronic kidney failure.
- Chemotherapy, radiotherapy and immunotherapy for cancer.
Private health insurance to supplement Medicare
If you are Private health insurance policy holder, you are still able to claim from and use Medicare services. This is because Private health insurance providers are not allowed to provide cover for certain procedures, treatments and costs that Medicare covers.
In the event that you go to a public hospital as a private patient, you will be able to claim from both Medicare and your private health insurer. You claim from Medicare for the services and treatment that they cover, and from your insurer for everything else that is within your policy.
As a private patient, both Medicare and your insurer will work alongside you to pay for your medical expenses. If you are a private patient in a public hospital, you will have to pay for the accommodation doctors’ fees and theatre fees. Depending on your policy,you may get some of these fees back. Medicare also subsidises for any doctor fees you may pay.
As a patient in a private hospital, Medicare will assist with 75% of the schedule fee while your insurer may assist with at least 25% of the remaining amount. The final coverage amount is dependant on the policy that you have with your insurer. Any cost that is above the coverage of Medicare and your insurer will have to be paid out-of-pocket.
Benefits of Private Health Insurance
- Reduce and claim back on out-of-pocket costs for certain treatments.
- Ability to choose your own doctor and surgeon.
- Less time spent waiting.
- Access to Private hospitals, private hospital rooms and personal care.
- Ambulance cover is generally included.
- Lifetime Health Cover loading charges and the Medicare Levy Surcharge are avoided.
Making an Informed Choice
Before choosing a Private Health Insurance Provider, it is essential to understand what is and isn’t covered by the policy. Assessing your personal requirements and the that of your family is a good means of ensuring that you receive a policy that matches your necessities. Factors such as financial capacity, coverage offered, and personal requisites should be used as a tool when deciding on a policy.
Comparing every option that is available will allow you to make the best decision for your needs. Depending on your personal circumstances and requirements, a policy may need to contain specific coverage. Every Private Health Insurance Provider offers different policies suited for many different needs. Understanding each policy is the best way to make an informed decision that perfectly matches your lifestyle.
Frequently Asked Questions and Answers
What services are covered by Medicare in Australia?
Medicare covers all your costs as a public patient in a public hospital. Medicare also assists in covering the cost of some pharmaceuticals and some or all the costs associated with seeing a GP or specialist outside of a hospital.
How does Private Health Insurance complement Medicare?
Medicare and Private Health Insurance greatly complement each other. Depending on the policy with your insurer, Medicare can assist with various general needs, whilst Private Health Insurance provides the additional coverage needed for specific requirements.
Is it mandatory to have Private Health Insurance in Australia?
It is not mandatory to have Private Health Insurance in Australia. Having a policy with your chosen health insurance provider provides you with an additional layer of coverage in the event of an unforeseen health emergency.
What are the implications of not maintaining hospital cover from the year one turns 31?
If you are below the age of 31 and take out a hospital cover policy, this lets you avoid paying higher premiums for private hospitals as a form of Lifetime Cover. If you are above the age of 31 and take out a hospital cover policy, you will have to pay higher premiums on your policy for 10 years.
How do state-specific variations, such as ambulance cover in Queensland and Tasmania, affect residents?
Ambulance cover is free for residents of Queensland and Tasmania. Depending on the state of residence, there may be subtle variations in cover. It is always good to ask your insurer about these state-specific variations and how they may affect your cover.