By Jessie Petterd, iSelect spokeswoman (sponsored by iSelect).
While the peak of the pandemic in Australia is thankfully starting to feel like a distant memory (how lucky are we!?), the effects on our purse strings may still be lingering. Many Aussie families are still receiving Government benefits, are in between jobs, on a reduced salary or in other compromised financial positions.
So when private health insurance increases again on April 1st this year (stinging families an extra $127 a year on average[1]) it’s understandable that you might reconsider whether you really even need private health cover. Especially if you and your family are young and healthy, it can feel tempting to drop your cover altogether and spend the extra cash on something you can actually hold in your hand – like a new TV or that trampoline the kids have been begging for.
But before you do, it’s important to consider what no health cover may look like for your family in today’s day and age. There’s a lot more to consider than most people think,so let’s dive in.
- Extended wait times for elective surgery: As a private patient, you could enjoy the benefit of shorter waiting times for elective surgery compared to a public patient. You may have heard that elective surgery wait times in many public hospitals have skyrocketed due to the COVID-19 backlog[2]. That means that if you or your family need elective surgery, you could be waiting months and in some cases, years for treatment if you were to drop your private hospital cover. Elective surgery, while not an emergency, is still considered medically necessary and can include things like the removal of tonsils or wisdom teeth and knee and hip replacements. Consider whether you can afford to wait around for surgery and how it might affect your household income if your injury or health issue was to stop you from working.
- Choice of doctor and hospital: Many Aussies find value in private health insurance with the freedom to choose their doctor or hospital. For example, if you were having a baby you would have the option to choose your obstetrician, perhaps one that comes recommended, and also choose the hospital where you’ll deliver – perhaps one close to home. Without cover, you will not be given a choice on your doctor or hospital so consider this carefully when weighing up the pros and cons.
- Extras may be saving you money in the long run: While you may be thinking you never claim on your hospital cover, perhaps it’s the Extras that make cover worth it for you and your family. If you have kids, regular trips to the dentist and physio are all too familiar or perhaps someone in the family wears glasses or contacts. Extras can help cover you for some of the cost for those services not covered by Medicare. If however, you feel like you’re not getting the most out of your Extras, you could consider opting for a flexible limit on your Extras so you’re only paying for what you use most regularly. This could even help bring down the cost of your premiums.
- You might be paying for things you don’t even need: Before you think about ditching your cover, consider switching. There can be a lot of money saved by simply shopping around and reviewing your cover. You’d be surprised how many people are paying for things on their policy that they don’t need (cue classic 80-year-old woman still paying for obstetrics). We hear you though, who has time to shop around and compare policies on top of everything else you do? There are health insurance comparison services available like iSelect that can help you work through what a suitable level of cover looks like for you from their range of policies and funds.
- Remember no cover could mean more tax: The Medicare Levy Surcharge slaps Aussies with $900or more in tax each year if they have a taxable income over $90,000 as a single or $180,000 as a couple and don’t have a suitable level of hospital cover. This is an important one to remember when you are weighing up the benefits of private health insurance. It may be more beneficial to at least pay for a basic level of hospital cover rather than throwing your hard-earned money down the tax drain.
So while the thought of ditching your health insurance may be appealing when you look at how much premiums have risen over the last few years, having no cover at all could end up costing your family more in the long run. While you don’t have to pay more than you need to on your health insurance though, it can pay (quite literally) to shop around. Who doesn’t want an extra few hundred dollars in their back pocket at the end of the day?
Disclaimer:
*iSelect does not compare all health insurance providers or policies in the market. The availability of policies will change from time to time. Not all policies available from its providers are compared by iSelect and due to commercial arrangements, your stated needs and circumstances, not all policies compared by iSelect are available to all customers. Some policies and special offers are available only from iSelect’s contact centre or website. Click here to view iSelect’s range of providers
[1] https://www.health.gov.au/ministers/the-hon-greg-hunt-mp/media/lowest-private-health-insurance-premium-change-in-two-decades
[2] Source: Rise in elective surgery activity following COVID-19 suspension, NSW Bureau of Health Information, 9 December 2020.
Source: Elective surgery waitlist blowout could last two years, committee hears, Herald Sun, 4 December 2020.
