Thankfully, nobody needs to get health insurance in Australia since we have access to Medicare. However, there are some situations where it may make sense to get.
Medicare doesn't cover out of hospital services such as dental, optical or physiotherapy. Health insurance can if you get extras insurance. Policies start from around $13 a month and a few let you skip waiting periods for things like general dental. If you don't use your extras consistently though, it might not be worth having a policy all year round.
The Medicare Levy surcharge (MLS) is a government levy of up to 1.5% on your income if you earn more than $90,000 (or $180,000 for couples) and don't have private health cover. If you earn $90,000, you'll pay around $75 more tax per month and $181 if you earn $145,000 or more. That money goes towards the public healthcare system. If you'd rather not pay that tax, you can avoid it with a basic hospital policy – they cost around $80 a month.
When you turn 31, a 2% Lifetime Health Cover loading (LHC) is added to your health insurance premium for every year you don't have hospital cover. That fee accumulates, so if you don't take out cover until you're 40, you'll be hit with a 20% loading. It also stays in place until you've held hospital insurance for 10 years. This seems like a big additional expense but AMA data suggests it may still be just as affordable if you don't take it out until later in life.
Public waiting lists for elective surgery are typically much longer than private waiting lists. If you don't want to wait, private health insurance might be a good option. Keep in mind though that if it's a pre-existing condition you're receiving treatment for – for example a bad knee – you'll need to have held cover for 12 months before insurance will cover you.
With private health insurance, you get to choose your own doctor and when you're treated. You can also get your own room in a private hospital, where possible. That choice may matter to you. If you're happy with a shared ward and any doctor though, insurance may not be worth the money.
| Response | WA | VIC | SA | QLD | NSW |
|---|---|---|---|---|---|
| Yes | 67.92% | 56.3% | 61.33% | 55.84% | 54.31% |
| Somewhat | 30.19% | 38.52% | 38.67% | 40.61% | 41.21% |
| No | 1.89% | 5.19% | 3.55% | 4.47% |
The government actively encourages people to take out private health cover to alleviate pressure on the public system. However, that doesn't mean it's always the right decision for you. For example, private health insurance might not be worth it if:
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