Do I need private health insurance?
Private health insurance
The good news is if you’re sick in Australia we have a great public safety net that will care for you and cover most medical treatments and expenses. The better news is if it’s an emergency you’re not asked about any private insurance before being checked into the hospital!
The not so great news is, if you earn over $90,000 as an individual or $180,000 as a family unit, you’ll have to pay the Medicare Levy Surcharge (MLS), if you do not have private patient hospital cover (private health insurance). This starts at 1%, then 1.25% through to 1.5% based on your income.
The other not so fun news is that if you’re over 30 years old and do not have private health insurance, you will essentially have a 2% loading (Lifetime Health Cover) applied to your health insurance when you take out the cover. This loading is applied every year that you do not take out cover. Yikes!
The system is designed to get as many people as possible out of the public health network.
Private health insurance is a great tool for elective surgery as you can choose the doctor you wish, and have a procedure on your own timeline as opposed to a public waiting list of up to 18 months.
Do not get sold on the extra benefits with private health insurance like optical, dental, physio etc. These are benefits – not the sole purpose for cover.
A good way to look at this question of need is as follows:
Under 30 and earning over $90,000 / family threshold – private health insurance is beneficial
Under 30 and earning under 90,000 / family threshold – private health insurance is a luxury
Under 30 earning under $90,000 / family threshold and have some health issues or injury prone – you may consider private health insurance
For those over 30, earning over $90,000 / family threshold – it’s probably a must have
For those over 30 earning under $90,000 / family threshold – it may be considered wise to have (even with minimal extras and higher excess to keep costs down and to avoid the lifetime loading).