The Alternative

When you’re deciding whether private health insurance is ‘worth it’, it’s only logical to consider what your alternatives are. After all, the value of being insured can really only be understood compared to not being insured.

The golden ticket

Do you have a Medicare card? If you do, you are very fortunate – you have access to free healthcare in one of the world’s leading healthcare systems.

If you’re an Australian citizen or you have a permanent visa, you are likely to either have a Medicare card or be eligible for one. For the purposes of this discussion, we are excluding reciprocal Medicare cover – if you fall into this category, you will probably be looking at a different type of private health insurance cover geared towards overseas visitors and students.

So if you are entitled to full Medicare benefits and decide not to take out private health insurance, what will you be covered for?

Going to hospital

Simply put, you’re covered. You can’t choose your doctor and you may have to wait, but you will be seen for free. Ironically, you may even pay less to be seen in a public hospital than as a privately insured patient (where you may have to pay an excess and/orĀ gap). Of course even if you have private health insurance, you can always choose to be seen as a public patient in a public hospital.

There are exceptions to what Medicare will cover in hospital, such as cosmetic surgery that isn’t deemed to be clinically necessary. But for the most part, if you need it, you’re covered.

Private health insurance hospital cover will give you benefits that are not available to patients that are treated through the public system. However, if you choose to be seen as a private patient, you are likely to be faced with additional costs. As of June 2018, the average contribution that privately insured patients needed to make towards their hospital stay was $308.73 (APRA). This additional cost comes in the form of the excess, co-payments, and gap payments. It’s important to understand that this is an average – you may have no additional costs, but they may also be substantially higher.

Medical services outside of hospital

Let’s start by discussing what Medicare will cover for your out-of-hospital medical needs. If you see a GP or specialist, you will get some or all of the cost of that visit back. Depending on the speciality and type of consultation, Medicare will pay up to a certain amount per visit. If your doctor charges more than Medicare’s limit, you will need to pay the difference.

Beyond this, Medicare will cover a mixed bag of medical services such as an eye test every two years, some x-ray and pathology tests, allied health services under some circumstances, etc. We’re not going to go into the detail here as this can get a little tricky and doesn’t apply to everybody. But there’s certainly a middle-ground of out of hospital medical services that may be covered by Medicare.

Need to see a dentist? Need a new pair of glasses? Need physiotherapy for your bad back? It’s unlikely you will get much, if anything, from Medicare. If you want to be covered for these services, you may be able to organise a management plan with your GP that could unlock some Medicare funding. Otherwise, you’ll need to consider getting private health insurance extras coverage.

Private health insurance with hospital cover may save you a significant amount on costs incurred seeing specialist outside of a hospital (depending on the clinical area and your level of cover), but will not cover any general practitioner costs. Depending on your inclusions, private health insurance with extras cover may save you money at dentists, optometrists, physiotherapists, etc., but you may still have to pay a significant portion of these costs yourself.

Pharmaceuticals

The Pharmaceutical Benefits Scheme (PBS) will cover part of the cost of medications you buy at the pharmacy, provided they are listed on the PBS. You will pay the full price for medications not listed on the PBS.

Some private health insurance policies with extras cover will reimburse you for costs incurred on non PBS pharmaceuticals. Not every policy with extras will include this level of cover, and even if it does you may still have to pay a significant portion of these costs yourself.

Ambulance

Medicare doesn’t cover the cost of ambulance services, and these costs can be significant. If you live in Queensland or Tasmania though, your ambulance costs are fully covered. If youl live in other states, you may also receive free ambulance cover (e.g. pensioners or low income earners), but elibility requirements differ from state.

If your state doesn’t cover ambulance costs or you are not in a group that is provided with ambulance cover, private health insurance policies can provide cover.
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IlanThe alternative