A no-nonsense look at the benefits of health insurance for young people
Have you ever used the words "aspiration" and "health insurance" in the same sentence? The answer is probably no, especially if you are young and healthy. So, rather than bore you with a jargon-filled compendium on how health insurance works, this guide will provide straightforward and practical advice about how private health insurance can be used to support you in achieving your real financial aspirations.
For many young adults in Australia, keeping your head above water financially is a daily struggle. If you're already burdened with rent payments, mobile phone bills and credit card debt on top of basic living expenses, the last thing you need is a hit to your wallet that you weren't expecting. Here are two common examples of ways that health insurance can plug what would otherwise be a gaping hole in your budget.
The great Australian myth about ambulance charges
It's a common misconception in Australia that ambulance transport is free and the reality can come as a very unpleasant, not to mention expensive, surprise. While the debate about the justness of this continues, the cut-and-dry is that all Australian states and territories except for Queensland and Tasmania will charge you for an ambulance call out.
- How can health insurance help? You can purchase an affordable form of health insurance called extras cover, which covers the cost of ambulance fees, as well as other services such as dental and optical.
- Why pay for something I probably won't use? Fair point, but accidents and mishaps that you have no control over can occur and could end up costing you over $1,000 out of your own pocket.
- Okay, so how affordable are we talking here? If you shop around, you can pick up a basic extras policy for as little as $11 a month that covers the entire cost of emergency ambulance transport.
- Can I get cover for ambulance only? Some health funds do offer policies that just cover emergency ambulance transport. While you don't get cover for other services, it is cheaper than an extras policies.
Save on dental fees while keeping your smile bright
Having someone in a mask dig around in your mouth with sharp metal implements and drills probably isn't anybody's idea of a good time, especially if you have to pay a hefty bill at the end for the experience. Unfortunately, this is all too often the case with visits to the dentist, as people over the age of 17 can't access bulk billing through Medicare for this type of treatment. Happily, there's a way to avoid these costs:
- Let me guess, extras health insurance right? This is only half right, or a quarter right depending on the portion of dental costs your policy covers. It's likely that the amount the dentist charges won't be fully covered by your extras benefit, which means you will have to pay the remainder.
- So what's the big secret? If you take out extras cover with a health fund that has a no-gap dental scheme, the cost of certain preventative dental treatments is fully covered with no out-of-pocket expenses for you. Here's how it works:
- Does this apply to all dental treatments? No, only preventative treatments such as check-ups, scales, cleans, X-rays, minor fillings and fluoride treatments. You won't be able to get the full cost of major dental work such as crowns, bridges and root canals covered.
- How does this save me money in the long-run? While it may seem trivial since it only covers the least expensive procedures, the whole point of no-gap dental is to encourage you to keep your teeth healthy so that you don't have to undergo expensive major dental treatments later on. It's a short- and long-term money saving solution.
Drinking less, not smoking and exercising more have become popular lifestyle trends amongst young Australians, with words like "quinoa", "kale" and "activewear" now common vernacular. At the same time, the rising cost of living, an increasingly competitive job market, social pressure and many other factors can take their toll, leading to depression, substance abuse and even suicide. Because of this, health funds have begun to extend their policies to cover the costs associated with both mental wellness and healthy living.
- Fitness benefits. You may be able to claim for exercise-related expenses such as gym membership, yoga sessions and pilates classes through extras cover. Benefits may also be paid towards the cost of external weight loss management programs, depending on your policy.
- Rewards for keeping healthy. Some health funds run membership rewards programs for keeping fit. For example, GMHBA rewards members of its Fit package policies with rewards points when you take part in eligible exercise activities. These can be used to purchase fitness products ranging from Fitbits to treadmills.
- Claim for alternative therapies. More and more extras policies are now paying benefits towards alternative treatments such as acupuncture, aromatherapy and Chinese herbal medicine. These are sometimes listed under naturopathy or complementary therapies.
- Mental health conditions covered. Many extras policies now cover the cost of psychology sessions, while cover for more complex issues requiring psychiatric treatment or drug and alcohol rehabilitation can be found in hospital policies.
Using the tried and tested carrot-on-a-stick approach, the Australian Government has three schemes in place that reward or penalise people, depending on whether or not they have taken out private health insurance, one of which is specifically targeted at younger Australians:
|Government program||What it does||Eligible types of health insurance|
|Lifetime Health Cover loading|
|Medicare Levy Surcharge|
|Private health insurance rebate|