Cover for a broader range of health services and general treatments, not covered by Medicare
Medicare covers a large range of health services and treatments, however, it doesn’t cover general treatment services, such as dental, optical, physiotherapy and psychology (mental health) services. General treatment services are partially or sometimes fully covered under your private health ‘extras’ cover.
Shorter wait times for elective surgery
Elective surgery is not considered an emergency but is still defined as medically necessary and in some cases may require urgent treatment, for example cataract surgery or joint replacement. The wait time in the public healthcare system is often lengthy and can vary significantly. One of the benefits of being a private patient is that your wait times can be reduced, and you’re generally able to schedule when you’re admitted into hospital for surgery.
The ability to choose your specialist or preferred hospital
Under the public system, you may have little say in the surgeon or specialist who performs a treatment, the hospital and the timing of the procedure. Benefits of health insurance include the freedom of choice and more control. It will also allow you to claim back some or all of your specialist’s fees and private hospital costs less any applicable excess or co-payment.
To avoid Medicare Levy Surcharge
If you earn above a certain income threshold and don’t have hospital cover, you’ll be subject to the Medicare Levy Surcharge (MLS). The MLS was introduced to encourage those with higher levels of income to take out private health insurance and reduce reliance on the public health care system for those who are unable to afford or access the private health care system. Visit ato.gov.au and search for ‘Medicare Levy Surcharge’ to find out more about the income thresholds and rates or speak to an income tax specialist.
Other government surcharges and incentives to consider
Lifetime Health Cover (LHC)
Did you know there are penalties for not taking out private hospital cover before age 31? The Australian Government introduced Lifetime Health Cover (LHC) which recognises the length of time a person has private hospital cover. If you start your hospital cover earlier in life and maintain it, you’ll pay a lower premium each year compared to someone who starts their cover at a later age.
The LHC is a charge of 2% per year added onto your health insurance premium for each year after the age of 30 where you haven’t held private health insurance, starting on 1 July following your 31st birthday.
Private Health Insurance Rebate
To help support with the costs of health insurance, you may also benefit from private health insurance rebates. This provides you an option to claim reduced premiums throughout the income year or a refundable rebate when you lodge your tax return. Visit ato.gov.au and search for ‘private health insurance rebate’ to find out more or speak to an income tax specialist.
Aged-Based Discount (ABD)
As an added incentive, some health insurers may also offer ‘Age-based discount’ for Australians aged between 18-29, which can range from 2% to 10% for each year you’ve held a policy under the age of 30. You’ll will retain the discount until you turn 41, then it will be gradually phased out by 2% each subsequent year until it reaches 0%.
Useful links
PrivateHealth.gov.au - Australian Health Insurance Information
Home | Australian Taxation Office (ato.gov.au)
