Hi guys! My husband used to have a much better paying job ($180k/year) so we had to have private health insurance to avoid paying the medicare surcharge at tax time. Now he is in a job that pays $100k/ year… we are weighing whether we need private health insurance or not. We live in country NSW and there is only a (very good) public hospital in the area, kids are quite healthy so no real concerns there. Any reasons to keep private health insurance? Any thoughts?
Private health insurance - worth it?
fabianafab on 26/10/2016 - 09:03
Comments
The new job will still warrant paying the medicare surcharge
Not correct.
For a couple the medicare levy surcharge threshold is $180k. For a single is $90k.
People buy health insurance for many reasons.
One is to avoid the surcharge if their income is above the threshold.
Other reasons could be peace of mind, bad health or if they know that they would not be able to afford hospital costs should the need arise and they are not confident in the public system.Correct, cypher may be referring to medicare levy, (as opposed to medicare levy surcharge) which will be 2% on taxable income.
Everyone with an income above $21335 has to pay the medicare levy ($33738 for pensioners).
OP was referring to the surcharge.Correct, as in referring to your comment being correct. sorry for confusion.
The main driver for me is being seen/fixed immediately if something random like a knee/shoulder injury and a reco is required. If relying on public system, depending where you are you could be waiting months for a joint reco or surgery, whatever it is.
For emergency injuries/illness, you would go to public emergency departments anyway because they are usually better equipped. But it's elective/non emergency scenarios that make private insurance worth while.
It's a gamble. All insurance is.
It's a gamble. All insurance is.
Yes, but it shouldn't be. You should know what you are covered for.
There is a huge asymmetry of knowledge between the insurance co and the person who takes out the insurance. The contracts should be simplified so that humans can understand them, not just barristers.
I meant its a gamble if you get injured/sick or live healthily for decades and never make a claim. I didn't mean a gamble on what you are covered for, although i agree it's never very clear which is how insurance companies like it :)
waiting months
Months? You'd have to be lucky, it's years.
Australia basically does not have a public system anymore for elective or non-urgent medical procedures. Note that non-urgent means literally people sitting at home in high levels of pain unable to work etc.
The situation as far as urgent medicine is getting worse. Sometimes people die when they shouldn't.
Pretending that the public system exists still is really burying your head in the sand.
Depends largely on where you live - which state and what condition the state system is in. Although none of them are in stellar condition from what I understand.
Not true! The public system is good and should remain that way if only people would stop the scare tactics.
I don't understand why people are unwilling to fund medicare thru taxation but so happy to hand over their money to fund BUPA CEO's new yacht.I don't understand why people are unwilling to fund medicare thru taxation but so happy to hand over their money to fund BUPA CEO's new yacht
Because the government essentially forces them by taxing them more if they don't and by giving them a rebate on the premium if they do.
Similar position to you; each year the premium increased by far more than the CPI. When our salary situation changed we were less inclined to be bribed to be pay the insurance premium
We cancelled our policy and now we are saving ~$400/month ($4800/year)
That's post tax; it's like a $6000+ pay rise….:)
Most dental claims were a joke, typical visit to a dentist involves huge out of pocket costs, eye wear attracts a $250 rebate - but we we pay $1000 for a pair of glasses (multi focal etc) so the difference is still huge…and for that $250 rebate we paid ~$400 that month.
We have a child with a chronic medical problem, and our specialist strongly cautioned against private medical providers as a) the care is better in the public system and b) the cost of private providers is enormous. She works in both private and public systems and is also a university professor; her advice was accepted.
Our three children were all born in the public systems and our care was delightful. We shared rooms with other new mums. which we appreciated, talking with myriad people from diverse backgrounds was a huge plus.
My brother always used private, his specialists would wander in a for a minute and charge '00s of dollars. When the baby appeared at 2AM, they received help from whoever was on duty at the time. So much for "choice of doctor"
Save your money.
Pregnancy cover with private health insurance is also highly misleading without thoroughly reading the PDS - you get no cover for the doctor(s), only the hospital stay. Nor do you get cover for a cesarean with many funds, so we were out of pocket nearly $4k for my wife's choice of doctor without a cesarean! Not something i was expecting having private health insurance and "pregnancy cover".
However we did enjoy and cherished the 5 day hospital stay post birth, so…….
So much to weigh up and make a decision on.
If you're over 30 and don't maintain a private health insurance policy you will have to pay a lifetime loading if you ever take it out again. Might be worth just maintaining a cheap private patient in public hospital policy to avoid this.
http://www.health.gov.au/internet/main/publishing.nsf/Conten…
Apparently some economists done the sum, and lifetime loading shouldn't really change much, it's designed to lure young people into buying health insurance even though they're likely to not need it.
My retired parents don't have private cover, have had major and not so major surgery and don't have many out of pocket expenses. They seem to be happy with their choice, occasionally grumbling about a test that the medicare rebate didn't fully cover, however hospital is free.
My retired inlaws have medical insurance, have had major and not so major surgery and are paying $1000's every step of the way. They seem to be happy with their choice. Both couples live in the same area (western Sydney) with access to the same hospitals.
While every person has individual illnesses, and live in different areas so access to different facilities, private cover seems to mainly get you more bills, less people in your hospital room, and a "choice of doctor", but who can pick a good doctor from a bad one?You definitely need to have Ambulance Cover. I wouldn't bother with the rest. We have a very good public health system. I doubt you will find this anywhere else in the world. There are people who abuse the system and put pressure on public hospitals. Be a bit patient and you will treated very well. No need to go private.
That's sounds like the words of someone healthy. Tell a person that needs knee reconstruction or hip replacement to wait patiently. They will scream back in agony that it's painful but public hospital will have hands tied because of lack of surgery time slots. It's not the emergency stuff but the elective stuff that you see difference in health care cover
You can always stump up the cash yourself to have it done right away in a private hospital. All the money saved on premiums over the years would likely cover it.
That's true but you must be diligent and ensure your savings keeps up with inflation. Private hip replacement costs $30k in today's dollars. Either way you need to save for a rainy day, but history tells us we are crap at doing it.
I agree.
My partner had a "suspicious" lump near the armpit. 2 GPs said it's probably just a pimple, but was referred for elective surgery anyway, just to be safe. So, we thought it will take years to be seen, so we were surprised that they scheduled the surgery and biopsy in less than 2 months. Yup, it was just a harmless folicle growth or something.Instead of enriching blood sucking corporations, I would rather save some money for dental emergencies (it sucks, cause dental health should be covered by Medicare).
We gave up private health insurance over 20 years ago after the birth of our third baby cost us a lot of money in out of pocket expenses and we had the highest cover you could get. Since then we have had a fourth child, kids with surgeries (cannot fault Westmead children's one bit), our youngest recent had surgery for a broken clavicle at Westmead, all covered by medicare. Two kids with orthodontics that we paid ourselves, husband has an elective surgery booked in November where we know the cost upfront. We have paid the extra Medicare surcharge for years. It is a gamble I guess if you need elective that is really expensive but we haven't regretted our decision so far.
To have free health care in Oz is fantastic. I just have to think of the affordability of medical care for the unemployed or those on low wages in the US for 10 secs & I realise how fortunate we are.
I'm 66yo and at one stage several years ago was in and out of emergency depts, hospital many times, required myriad tests etc. All at no cost.
My diagnosis and subsequent fix was time-consuming and complex, however, none of this was due to lack of expertise, appt times, bed space, op theatres etc, it was simply a non-life-threatening but complicated situation. All the hospitals, specialists, and staff involved were superb.
I'm resident in WA and don't have private health insurance.
I, for one, am astounded at how well our health system works.
Re AMBULANCE COVER: It varies from state to state. In WA, if you're over 65yo and receive full pension, all ambulance trips (whether urgent or not) are free. If on part-pension, a discount is applied though I'm not sure what that is.From someone who works in Health.
Extras/Ancillary cover is a rip-off. PHI companies make a lot of profit from this type of insurance. Premiums increase each year greater than CPI but your rebates don't. They try to incentivises patients to go to their company owned facilities (usually providing lesser quality care) so that all their rebates just go back in house.
Hospital and ambulance cover - I haven't done the calculations but from what I've read, it might be worth it.
I agree that theoretically if one is disciplined enough, the premium that you would have paid can be placed tucked away in your bank account designated as "medical funds" and never used. This would let someone come out ahead as long as it's done early enough and you're relatively healthy while the money grows initially.
Avoiding the medicare levy surcharge is another consideration. I do hate how the government is incentivising us through taxation to add to a non-government corporation's profits.
The new job will still warrant paying the medicare surcharge, so if that's the drive nothing has changed. Private health is a gamble like any insurance policy, it only presents any value when you need it. If you have discipline, take that amount you are currently paying each month and put it in a high interest account to be used in the event of a medical emergency. However if you get a sting of bad luck those funds will be depleted and then some. Biggest advantage for me of private health is the wait time for procedures, again its all a gamble.