As premiums rise faster than wages or inflation, most Australians, young ones in general, are discarding health insurance and do not consider it a top priority. In 2018, the number of young adults taking out health insurance dropped by nearly 7%.
Should they reconsider? Is health insurance worth the investment?
Do you really need a health insurance in a country where there’s already access to free healthcare? This will depend on your personal situation.
For hospital and medical costs or for health problems that need to be treated in the system, a health insurance is designed to cover policyholders.
Through the public system, there are some covered (or partially covered) healthcare costs by Medicare — but there are some which aren’t covered at all. It will cost you.
Generally, hospital cover and general treatment (extras) are the 2 main areas of a health insurance. Ambulance cover may be a 3rd area of cover depending on your state or territory.
- Skip the waiting list for treatment — This is helpful if you’re receiving elective surgery (hip or knee replacement). Those with health insurance can lock-in a date of the surgery.
- Choose a preferred doctor — In the public system, the surgeon or doctor who’ll perform the operation is the one on duty at the time.
- Hospital rooms — If you’re giving birth, you may have a better chance of scoring a room with your partner.
- Avoid the Medicare Levy Surcharge — As part of most Australians’ tax, they pay the Medicare Levy of 2% of their taxable income.
- If you’re single or has a family, on an income of over $90,000 or $180,000, you may be subject to a surcharge of at least 1% of your income on top of the basic Medicare levy.
- There’s an exemption from paying the Medicare Levy Surcharge — those health insurance members with a sufficient level of hospital cover.
- Dental work can be covered — A clean or check-up isn’t covered by Medicare. Access to these is usually limited and eligibility varies.
- Claim money back — With extras cover in your health insurance, you can receive a rebate on health services that aren’t covered by Medicare.
- Cost — With costs generally rising annually, you could be forking out thousands of dollars in premiums, depending on the policy.
- Treatments that are not covered — Some types of treatment or procedure may not be included depending on the policy.
- Complex products — To simplify the products on offer, the government introduced the Health Insurance reforms.
If you’re 31 years old and you don’t take out a health insurance, you can be hit with the Lifetime Health Cover (LHC). For every year that you don’t get a health insurance after the age of 31, you’ll be charged a 2% loading on top of your premiums if you choose to take out a policy later on.
It’s an extra cost as the LHC loading lasts 10 years and goes up to a maximum of 70%.
Although, an 8% LHC loading would apply to the cost of your cover for the next 10 years if you decide to wait until you’re 35.
So, is it worth it or not? It depends. While others may not need it for a while, some can definitely benefit from taking out cover.
To make sure it’s still suitable for your personal situation, don’t forget to review your policy every year if you do decide to take out a health insurance.
If you consider taking out a health insurance but don’t have money for it, cash advance loans can help you!
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