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Health Insurance Overview in Australia

By Simon Cooper
May 26, 2022

On usual uninterrupted days, most people fail to realise the importance of health insurance. However, the blame could not be fully placed on these people because why would one rush to get protection when not even in danger?

Health insurance provides financial protection in the event of a serious accident or illness. It helps protect the individual from the financial burden of an unexpected medical bill, provides preventive care, and is required by law.

In Australia, permanent residents without private health insurance are covered by the public healthcare system. Medicare finances access to doctors, specialists, optometrists and treatment and accommodation in public hospitals, plus a few other perks through subsidies.

Types of Insurance in Australia

Public Insurance

Public insurance in the country is also called Medicare. It provides a high level of healthcare for all Australian residents so that they may have access to hospital treatment and lowers the cost of medical treatment outside of hospitals. It is important to note that Medicare doesn’t cover treatment in private hospitals, emergency ambulances or services like dental treatment and physiotherapy.

Private Insurance

Private health insurance covers hospital treatment, medical treatment, extras and emergency ambulance. The treatments and procedures you can claim for will depend on the level of insurance you choose.

Some would argue, and rightly so, that why would they need to avail a private insurance policy if they are already being covered by Medicare? It is not quite simple since you have a lot of factors to consider when choosing the right type of insurance so you must always carefully consider both its pros and cons.

  • Hospital cover – One of the major reasons that a lot of people opt for private insurance is that it helps to cover your costs in hospital which means you are practically covered for things like treatment, accommodation and nursing care.

✔ Skip the public hospital waiting list for elective surgeries

✔ The ability to choose own physician

✔ Access to private hospitals

✔ Better access to private rooms in public hospitals

✔ Avoid paying the Medicare Levy Surcharge as long as you earn more than $90k a year, or $180k for couples and families.

✔ Avoid paying the Lifetime Health Cover loading which applies if you haven’t got hospital insurance when you’re over 31 and you do eventually decide to get private hospital insurance later.

  • Extras cover – This covers you for out-of-hospital medical care. Since Medicare is a public insurance, it is understandable that it has limited coverage so services like dental treatment, optometry, physiotherapy that are not covered by Medicare are included in a private insurance policy. There are two groups of people who benefit most from extras insurance:

✔ Families – Families pay the same health insurance premium as couples or double the singles premium so children are effectively insured for free. It is important to note that children under the age of 5, receive, on average, less than $100 of benefit a year while children aged between 10 and 14 clock up an average benefit of nearly $400 a year.

✔ People aged 55–79 – Compared with other age groups, this group makes the most of their extras cover benefits, receiving an average benefit of more than $600 a person a year.

  • Combined cover – This is simply hospital and extras combined into one policy. This is very convenient since it allows you to deal with one health fund for both types of insurance. It can also be useful for the health funds because it means they’ve sold you two insurance policies in one go.
  • Ambulance cover – Since Medicare can have limited coverage, ambulance expenses are not covered by it although some people will be covered for ambulances by their state government. For the general public without private health insurance, an ambulance subscription may be the only option should the need for one arise but this can also spike up your bill in the high hundreds so it is important to check whether your area is covered or not.
  • Waiting periods and switching – Should you decide to switch insurance policies, you may have to wait for a period of time before being eligible to be paid benefits for some treatments or services. However, you need not worry about waiting periods as long as the policy you changed to is comparable to the one you once had.

✔ The waiting period for extras varies between policies. For most services, it is usually 2 months, 12 months for major dental and orthodontics, and 36 months for hearing aids.

✔ The waiting period for hospital cover for pre-existing conditions and child birth is generally 12 months.

✔ The waiting period for switching to a cover that is lower than your previous insurance is longer since the waiting period you served on your previous policy will be carried over.

Health Is Wealth

For most people, it is hard trying to plan for something that is rarely likely to happen, like a medical emergency. Of course, it is harder to imagine for individuals who prioritise their bills and other necessities over anything. Putting your daily living expenses on top of most things is actually very smart but including a health insurance policy in your plans is not only smart but a strategic and practical decision that will not only protect you but your family as well.

The idea of health insurance, policies and coverage, might sound so simple yet a lot of people do not realise that it is a complicated thing to fully grasp but we are here to help.

At Forward360, it is our goal to help you in financial planning towards wealth creation because health is indeed wealth. Our highly experienced team of financial advisors, are well equipped to help you decide on which insurance to get, its policies and coverage that can give you financial protection. We will help you come up with an effective insurance management strategy to make sure that the benefits are fully utilised by yourself and your family. Live life healthier, wealthier – sooner. Contact our support team today.

Simon Cooper

Co-Founder, Managing Director, Financial Adviser

Simon is a financial advisor who takes his work seriously. He ensures that all of his clients receive the best possible advice, so that they can reach and exceed their financial goals, both personally and professionally. Simon has been in the business for many years, and has a wealth of experience to share with his clients. He is known for being friendly and approachable, and always puts the needs of his clients first. Simon Cooper is an Authorised Representative of Reedy Capital Pty Ltd (AFSL No. 495539), Authorised Representative Number 1248807 and a financial adviser at Forward360.

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