Health Insurance - Do I need it?

Health insurance is complicated – not to mention expensive – and Medicare is free and available to all Australians. Figuring out whether health insurance is right for you can be tricky.

That’s why we’ve created this simple quiz to help you figure out whether you would benefit from hospital cover, extras cover, both or neither. If you find it useful, share it with your friends!

Do I need health insurance?

Health insurance is not compulsory for Australian citizens, as we have access to Medicare. Essentially, the decision to take out private cover comes down to where you are in life and what's important to you.

Maybe you're just looking to avoid Medicare Levy government surcharges, or you're tired of public waiting lists keeping you away from a speedy recovery.

There is an option for everyone, so we'll break it down to the basics.

When does it make sense to get health insurance?

There are plenty of cases where insurance will actually end up saving both your body and bank balance in the long term.

Here is when health insurance is typically worth it:

• You’ve passed the salary threshold. Not only does health insurance bring a rebate at tax time, but having an eligible hospital policy (more on that in a second!) will save you from the Medicare surcharge levy of up to 1.5% of your income if you earn more than $90,000 a year.

• You're turning 31. If you think you’ll ever need hospital cover in your life, you should take it out now. Waiting until you’re 31 or older to get health insurance leads to a 2% increase on your premiums for every year you wait. Getting in early saves you from this expense.
• You don't want to wait around. While Medicare is fantastic, it doesn’t cover everything. Elective operations like laser eye surgery aren’t covered by Medicare at all, and even those that are can lead to waiting times of months. Hospital private insurance lets you skip the public queue and claim those necessary elective operations.
• You don't want to be worried about dialling 000. Situations where you’ll need to call an ambulance can be unpredictable and unavoidable. It can also cost hundreds (if not thousands) of dollars. Hospital and extras private insurance can cover it, so you're never stuck with a huge bill.
• You spend money on everyday health needs. Whether it's a new pair of specs, keeping those pearly whites sparkling or even a remedial massage on the weekend, extras cover gives you substantial discounts on paying for a range of treatments.
• You want to have more choice. If you want to be close to home or in a private room being treated by a specific doctor, health insurance can give you that.
• You're thinking about starting a family. Health insurance can give you a cost-effective way to make sure you have a high standard of health care. Top hospital cover can get you your choice of obstetrician, a private room and help with costs like pre and postnatal classes. Keep in mind that there is a 12-month waiting period for pregnancy services on most policies.

When is it not worth it?

If you’ve read this far and thought we haven’t really described you, fantastic! It may make sense to not worry about insurance in the following situations:

• You’re young and healthy. If you’re in your early 20s and the last time you got sick was a cold three years ago, it may make sense to hold off on insurance. You may still want to go for an extras policy though. For example, you may want psychology cover to help with all those tricky questions about existence that have started creeping in!
• You like the public system. If you don’t mind what doctor you see or what hospital room you get, and you can afford to wait for whatever procedure you need, you may not need insurance at this time.
• You wouldn’t get much back. If you’d be paying $500 a year for insurance but only claiming a few hundred on physio or new glasses annually, you might want to cut the extras policy for now.
• You feel like you're being pressured into unneeded cover. Just because the ads on TV say you need a private fund in case anything goes wrong, remember that the public health system will still provide high-quality care in an emergency. Make sure you only buy insurance if it makes sense for you!

How do I find the right cover?

There are three main types of health cover: hospital, extras and combined policies.

• Hospital. This covers all the big medical expenses related to hospital. In an emergency, hospital cover can get you a fast ambulance to a private hospital and get you set up for whatever operation you might need as well as help pay for of it. Hospital cover can help you avoid waiting periods for elective surgeries.
• Extras. This is the tailored part of a health policy. Do you have a back injury? Tricky feet? Expensive prescription medication? Extras policies can help save you hundreds every year for ongoing problems ranging from psychology sessions to chiropractic care. These are highly customisable for your personal needs.
• Combined. This is some combination of the above. Often, bundling these together with a single fund will drive the overall cost down as well as let you pick and choose exactly what you need.

How much does it cost?

Health insurance can cost as little or as much as you like depending on your needs.

• Basic hospital cover typically starts at $14.85 per week
• Extras cover typically starts at $3 per week
• Combined cover typically starts at $19 per week

_{All prices are based on a single person living in NSW. Prices are correct as of March 2018.}

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