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19 Frequently Asked Questions About Private Health Insurance

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Anneke Van Aswegen Published/updated: October 10, 2017
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Understanding Private Health Insurance can be as difficult as trying to decode grocery store labels.

Whether you’re leaving the nests and need to find your own health cover, immigrating to Australia or wondering whether your health insurance is still providing value, we have the answers to you are looking for.

We’ve compiled and answered 19 of your most frequently asked questions, to help you choose the right health insurance for your unique requirements.

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1. Who needs Health Insurance in Australia?

Life is unpredictable. People generally purchase health insurance to protect themselves from the unknown – illnesses and injuries.

Whether you need health insurance or not is a personal choice and should depend on your specific circumstances – your age, medical history and your family makeup. If you want to avoid the Medicare Levy Surcharge and Lifetime Health Cover loading, then you want to get private health insurance, specifically hospital cover.

However, women between the ages of 20 and 30 have a higher claim rate for private benefits, specifically pre- and post-natal care and assisted reproductive services. People over 60 also rely more heavily on private health funds to cover the costs of joint replacements, dentures and hearing aids, palliative care and cardiac-related services.

With private health insurance:

2. Do I need Private Health Insurance if I want a baby?

No, you do not need to have Private Health Insurance if you want a baby. Medicare covers some of the expenses during the pregnancy and birth. For example, it is usually free if you go to a public hospital as a public patient, to have your baby delivered.

However, pregnancies don’t always go according to plan, you or your baby might require medical attention due to complications. Also, if you need assisted reproductive services like IVF treatment, then you need private health insurance to have a baby because it can cost you a fortune.

You might also want to consider private health insurance if you want to be able to choose your own obstetrician, want your partner to stay with you in the hospital or need help covering all the costs associated with staying in a hospital as a private patient.

3. Do Permanent Residents need Private Health Insurance in Australia?

No, permanent Australian residents do not necessarily need private health insurance. As a permanent resident, you fall under the Public Health Care System (Medicare) and the Pharmaceutical Benefits Scheme. However, Medicare does not cover all treatments and services.

If you want greater financial security and access to a wider range of health services, you might want to consider taking out private health insurance. Benefits include:

4. Why should I have Health Insurance?

You might need health insurance because it provides you peace of mind knowing that, no matter what happens, you and your family’s medical needs will be taken care of and you won’t have to pay for everything yourself.  

Private health insurance enables you to get the best treatment and services inside and outside of the hospital.

5. Do you have to pay the Medicare Levy if you have Private Health Insurance?

Buying hospital cover exempts you from paying the MLS (Medicare Levy Surcharge). Only when you don’t have an appropriate level of hospital cover and earn more than $90 000 per annum, will you have to pay MLS.

6. What are the advantages of taking out Private Health Insurance in Australia?

You’ll be treated as a private patient whether you choose to go to a private or public hospital. This means you decide which doctor treats you, at a time that best suits you.

You will also be covered for many more services not covered by Medicare, like physiotherapy, ambulance services, optometry, dental, podiatry services and home nursing.

Another big plus is you won’t be put on a long waiting list before receiving elective (non-critical) surgery. Waiting lists and priority patient order will no longer apply to you.

7. Is it compulsory to get Health Insurance for every citizen of Australia?

No, all Australian citizens qualify for Medicare and the Pharmaceutical Benefits, so private health insurance is not mandatory.

It is only when you want additional treatments and extras that you might want to consider private health insurance. Private health simply paves the way for better medical care, contributing to your overall healing and peace of mind.

8. What sort of demographic goes for private Health Insurance in Australia?

Both individuals and families who want to avoid the taxable Medicare Levy Surcharge will generally purchase private health cover.

Let’s assume you have a taxable income of $100K a year. You have 2 options:

  1. Pay an extra $1,000 annually in tax to cover the Medicare Levy Surcharge, or
  2. Pay $960 per year for a basic private health insurance plan and get access to various benefits.

Besides potentially saving $40 with option 2, you will also avoid dangerously long waiting times in the public system as well as getting cover for dental and ambulance, depending on the policy you choose.

9. What is the average cost of Private Health Insurance?

The average cost of private health insurance for a single person purchasing hospital cover only will vary between $750 and $875 per annum and $575 per annum for ancillary/extras cover.

Premiums vary depending on the health fund and policy type you choose, however, there isn’t too much cost difference between families, single-parent families, and couples; each variation might cost you around double the premium of singles cover – an estimated $1,600 per family for hospital cover and $1,150 for ancillary/extras cover.

You can also reduce your premiums when choosing to pay annually, instead of monthly, as this reduces administrative costs and time for the health insurer.

10. Which is the best value for money Private Health Insurance in Sydney, Australia?

There is no one size fits all. When looking for the Private Health Insurance that offers the best value for money, you need to be clear about what your needs are.

For example, do you want a policy that provides cover for any foreseeable and unforeseeable event or do you simply want a basic policy to avoid government penalties? Are you planning to start a family or are you nearing retirement?

Private health insurers generally offer you 3 options:

  1. Hospital only: Covers in-hospital treatment and accommodation costs in either a private or public hospital, as a private patient.
  2. Extras only: You are covered for the out-patient (day-to-day) medical services that Medicare doesn’t cover like acupuncture, chiropractic, dental, and physiotherapy, optical and other alternative therapies.
  3. A combination of hospital and extras: You’ll receive a wide range of services more specific to your budget and individual needs, both in and out of hospital.

11. What is the average cost of a health insurance in Australia for a non- Australian family of four members?

Health insurance for a family of four visiting Australia on a 485 Visa can cost anywhere from $42.62 up to $114.95 per week depending on the policy and health fund you choose.

There are several insurers who offer 485 health insurance, including:

To get international family health insurance, you need to get a quote from the health fund of your choice, accept their terms and conditions, and pay your first premium. You can compare different health fund when clicking the link below.

12. What is the most affordable health insurance in Australia, for someone on a visitor visa?

If visiting Australia is on your bucket list, you’ll need to spend some time looking into private insurance. Getting sick or injured in Australia without health insurance can cost you a fortune.

Private insurance will cover some or all of the costs, depending on your policy type, associated with your medical expenses. The sort of health insurance and price you’ll pay depends on the cover you need for your unique circumstances.

As an example, single adults visiting Australia will pay $93.70 for basic overseas visitor cover from Australian Unity, while Medibank provides overseas visitor health insurance for $130 per month.

While there may be cheaper health insurance policies out there, make sure you look at why they are so cheap. Remember, you generally get what you pay for.

13. What is the best health insurance (cost effective) for international students who are applying for a graduate visa (subclass 485) in Australia?

A Temporary Graduate Visa (subclass 485) enables you to live and study in Australia on a non-permanent basis. You can only access the subclass 485 once, as a primary applicant.

One of the requirements for this visa is acquiring private health insurance in Australia, as you will not be covered by Medicare, Australia’s national health scheme. However, if your country has a reciprocal agreement with Australia, your medical needs might be covered.

The lowest-priced 485 visa hospital insurance approved by the Department of Immigration, is the Budget Visitor Cover, which you can for $17.45 per week for singles. This amount will double if you are a couple.

AHM, Bupa, Medibank, and nib are all good options for affordable student health insurance in Australia.

14. What is a good Tourist Health Insurance Plan for a 3-month visit to Australia?

If you are planning a 3-month visit to Australia, be prepared. Consider taking out the highest level of hospital cover you can afford, Australian medical services are very expensive.

You might want to consider a Short Stay Visitors Cover, Visa 600. Some of the health funds offering cover for tourist include:

15. What do Australian expats do for health insurance when visiting Australia?

Overseas Visitor Health Cover (OVHC) covers expats’ medical needs while they are visiting or working in Australia. Every OVHC policy differs in cost, benefits and who is eligible to receive cover.

If you are from the UK, Republic of Ireland, Sweden, New Zealand, Finland, the Netherlands, Norway, Belgium, Malta, Slovenia or Italy, you may apply for Medicare benefits under Reciprocal Health Care Agreements your country has with Australia. This will help with the costs associated with serious illnesses or injuries that can’t wait until you get home.

You’ll be covered from Day 1 of your stay in  Australia. The validity of benefits depends on the country you are from:

However, as an expat you do need to be aware that there is quite a difference between Private Health Insurance in Australia and International Health Insurance:

16. Which Health Insurance should I buy if I move from India to Australia on a 457 visa?

A 457 visa is a long stay working visa that enables you to relocate to Australia where you can work for up to four years.

However, you cannot apply for this visa unless you have been approved by an Australian business and purchased appropriate health insurance for both yourself and any accompanying family members.

To satisfy the health insurance criteria, and find the most affordable cover, try one of the below funds:

17. As part of my subclass 457 visa application for Australia, I am required to find Health Insurance before I get there. Which Health Insurance Provider would you suggest to me?

Without knowing your specific requirement and circumstances we can’t suggest which health insurance policy will be best suited to you.

However, comparing health funds by price, features and benefits is a great first step in finding the right cover for your unique needs.

Although cost is important, it shouldn’t be the only factor to consider. Choosing the right plan should give you peace of mind that you’ll be covered should something unexpected happen while working in Australia.

18. Can you get Health Insurance if you have a pre-existing condition?

Yes, you can. However, you will have to serve a predetermined waiting period before you can claim any benefits. This waiting period is generally 12 months long, although some health funds might require you to serve 18 months.

A pre-existing condition is NOT determined by yourself or your GP; it is the health insurer’s appointed medical practitioner that determines whether an ailment, illness or condition (cancer, obesity, or diabetes) is pre-existing.

However, if you are switching from one insurer to another and want a policy offering the same or similar coverage you will not have to re-serve the time you’ve already waited on your previous policy. If you can prove your previous insurance was uninterrupted, this insurance coverage can be added up and credited toward any pre-existing condition exclusion you might have.

Once this waiting period is over, you will receive the full benefits of your policy.

19. Is Health Insurance available for cancer survivors in Australia?

Yes, similar to the above mentioned pre-existing medical conditions, private health funds will provide coverage if you’re a cancer survivor.  However, you will have to serve a waiting period as determined by the health insurer’s terms and conditions. Once you served the waiting period you can claim your benefits.

Make sure you invest in a policy that will help cover the costs associated with cancer treatments, like chemotherapy, radiotherapy and surgery, in case you are no longer in remission.

Conclusion

Besides paying for medical benefits, Health Insurance buys you confidence. This is especially comforting when you’re travelling abroad, survived cancer or have a family. Knowing you’ll have access to a range of benefits and subsidised treatments removes a lot of concerns.

If you have a question not answered in this article, please submit a comment below. We would love to help you on your health insurance journey.

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