How healthy you are is likely to play a significant role in determining the value you get from your health insurance. This may seem like a somewhat counterintuitive argument – we take out insurance specifically because we want cover for the uncertainties that lay ahead. Nonetheless, it makes sense to consider your health when it comes to health insurance in much the same way as you consider whether you live on a flood plain when taking out home and contents insurance.
Past performance should not be used as an indicator of future success…
Let’s put the disclaimer up top, front and centre. Just because you’re healthy now doesn’t mean you will be healthy in the future. In fact, the one thing you can count on is getting less healthy as you get older, at least over the longer term. If the benefits of private health insurance are otherwise attractive to you, but you think it’s unnecessary because you’re generally fit and healthy, you may find your personal circumstances change very quickly. And insurers are allowed to impose 12 month waiting periods of pre-existing medical conditions, in part to discourage this type of behaviour. This is also why the government introduced the Lifetime Health Cover loading.
We strongly encourage you to balance the common sense approach of considering your health needs with the reality that the future is uncertain.
The Safety Net
When considering your overall level of health, likely future health needs, and the inherent uncertainty of the unknown, it’s worth keeping in mind that the alternative to private health insurance isn’t no health cover. It’s actually a world class public hospital system. When it comes to extras cover the story is a little bit different – unless you’re fortunate enough to be covered as a member of a specific group (e.g. Pensioner Concession Card holders), you’ll need to pay for this yourself.
How ‘healthy’ are you
This one doesn’t need much explaining, but it’s the first and most basic step of considering your health needs. Notwithstanding the uncertainty of what may happen in the future, the less healthy you are, the more valuable private health insurance may be to you.
When you are considering your overall level of health, think beyond the obvious aches, pains and known medical issues. Even if you aren’t planning on falling pregnant, is it a possibility? Do you go for regular dental check-ups, or do you have remedial massage sessions? The fuller the understanding of your medical needs, the more confident you can be that whatever decision you make about private health insurance is the right one.
Explore your potential health needs
Let’s say you play competitive netball. Even though you’re reasonably fit and healthy, your knee has given you trouble before. Or maybe your knee is perfect now, but you’re conscious that the abrupt changes of direction that you’re doing hundreds of time each game have the potential to create big problems with no warning. Knee reconstructions are a perfect candidate to be covered by private health insurance – they may not be viewed as being high priority in the public system so without insurance you may be waiting for a while. You may also want to choose your own surgeon to make sure you’re being operated on by someone you trust, to get back on the court as soon as possible.
Pregnancy is another great example of where private health insurance can add significant value. Many otherwise perfectly healthy women take out insurance specifically to be covered for pregnancy. Women often want to choose their treating obstetrician, and place significant value on being comfortable during their hospital stay.
If we use another example, let’s say you have a history of respiratory infections. If you’re unfortunate to end up in hospital for a respiratory infection, the chances are you will be seen in an emergency context given the potential impact that it will have on your breathing. The only benefit of private health insurance will be to make you more comfortable – it’s very unlikely that you will be able to choose your doctor, and waiting lists are unlikely to be an issue given the urgency to be treated.