Students Guide to Private Health Care in Australia

Graduating Student?

For graduating students, being covered under a ‘family’ package no longer applies once you have completed studies. This means for myself, and some of my friends, the decision needs to be made. Should I ignore this information and put off health care until my late twenties to avoid the premium? Should I sign up now, in my early twenties, in case I require assistance beforehand?

Some people are more high-risk than others. For example if you play contact sports, there is a higher chance you will end up with an injury. So you are someone who should pay extra attention to health care. But how do you select a health care that is suitable to your needs, and what will your cover buy?

Matt Allison, Media & Corporate Communications Manager at Bupa, suggests that if you select the right cover, it can help you to save money in taxes.

“So if you’re single, earn $85,000, and you don’t have hospital cover; you pay an extra $850 in tax each year. Realistically, that’s throwing money down the drain when you consider that you could have purchased our Active Saver health cover for potentially less than the cost of the extra tax.”

Whilst not all of us are going to earn $85,000 in our first year out of university, it is still useful to consider the money you can save. But also what it will buy you.

“The value of private health insurance is far more than just tax savings and rebates,” said Mr. Allison.

In addition the MLS tax advantage scheme means that low-income earners are eligible to higher federal government rebates. If you still aren’t interested in private health care after reading this, Matt warns you can expect to pay an additional surcharge of 1-1.5% for hospital cover.

“This means that a single person earning less than $84,000 in Victoria would pay $107.40 per month for our Top hospital cover $500 excess, while a higher income earner would pay up to $153.45 for the same cover.”

Besides Bupa, there are other leading private health providers, such as Medibank, HCF, and nib to list a few. The amount of organisations can be confusing, so how do you even start finding the information you need? The main factor is not to be too concerned if you think you might find a better deal later on. “Once you sign up with a new insurer, they’ll manage the transition process on your behalf,” said Mr. Allison.

Top Tips

Whichever fund you select, Matt Allison provides this advice:

1. Select less comprehensive cover by ditching the ‘extras’. “It’s also important to understand the trade-offs you can make when considering which package is right for you. For instance, you can generally reduce your premium by either selecting less comprehensive cover, or by selecting higher excess. However, it’s important to balance affordability with cover that meets your requirements.”
2. “In addition to saving money, you’ll also have the peace of mind knowing that you can generally choose your own doctor.”
3. “It’s also important to remember that you don’t have to be sick to get value from your health insurance. Most extras cover can be used for preventative measures like regular checkups at the dentist, as well as potentially paying exercise program benefits for gym memberships or yoga classes.”

So are you thinking about investigating private health care options now? Or are you happy to put it off until your late twenties hoping that like the essay you left until the last minute, you’ll just wing it? Sure private health care is profitable for insurance businesses. However it benefits a lot of other people in the community too. Young singles are a group missing out on understanding the benefits of health care, which is a shame, as they are the ones with the most years ahead.

Benefit of Private Health Insurance

Who does private health care really benefit? The community? The doctor? The individual? Greedy insurance companies? That friend who always seems to be sick? Conducting some research into private health funds, the answer appears to be all of the above. But unfortunately, it seems to benefit young singles less. Why? According to statistics from the Roy Morgan Research group, young singles are the least likely to have private health insurance coverage.

As a young single, you might not find this surprising. You just turned twenty-one, and besides a chronic birthday hangover, you’re feeling fine! After spending $20 on that cocktail last night, you don’t think you should perhaps invest in protecting your future health. Following a night out, you know that it won’t take long until your headache will eventually subside. But what if you were stuck with a problem that won’t go away? Could you live with that headache for months? Years? If you don’t have private health insurance, it is possible that something like this could happen.

Yes, if you have an urgent medical problem, it can generally be treated right away. So if you had too much to drink and fell over and broke your ankle, you don’t have to stress. Though if you have hurt your knee on the dance floor, and it is only considered eligible for elective surgery, you’re actually in a lot of trouble. Say goodbye to your Friday night mixed netball team or running along the lake on a sunny afternoon. Welcome to the long and painful waiting list that is commonplace in public health.

Dr. Rona Hiam, GP at the University of Canberra Health & Counselling Centre, has seen both her children sign up to private health fund at different stages of their lives. After her son injured his knee, he decided to join a private health insurance, but it wasn’t until after the experience of a prolonged wait for surgery in the public system. Unfortunately this seems typical, because most young people think they’re invincible.

“In terms of benefiting the individual, I would advise anyone to sign up to private health care before they are thirty” said Dr. Hiam.

The reason for this is that after turning 31 years of age, the government incentive ‘Lifetime Health Cover’ means that you won’t face a penalty premium. So if you don’t become a member before then it could cost you a lot more later on.

As a current practitioner, Dr. Hiam recognised that high premiums affect the decisions that young people make in selecting private health care cover.

“Most families in the Canberra region are quite well off, so affording health care doesn’t seem to be too much of a problem,” said Dr. Hiam.