$1800 'Out of Pocket' for Family Health Insurance - Worth It?

ErlichBachman on 25/05/2021 - 09:58
Last edited 25/05/2021 - 10:08

Hi guys

I have done some calculations on what our family (2a and an almost 2yo and an almost newborn) currently are spending on healthcare/extras and it works out at approximately $3500/year that we are spending and paying for in full with no health insurance.

Through work I have access to a corporate health policy that would cover my family, has nil excess and is top level hospital cover covering pretty much everything (no option to reduce the things covered but I guess it's nice to have the peace of mind everything is covered if we were to go with that).

With my calculations of what we are spending now already, and then adding the yearly premium including LHCL and then subtracting what we would be 'claiming back' for the same extras we are already getting, it works out at $5300 total spend for the year.

This therefore makes the equation paying $1800 extra for what we are already getting, but we would have the nil excess top level private hospital cover for our family.

My partner and I are struggling to see the major benefit here though, given our experiences in the public system have been so good, especially if we have ever needed to take our 1 year old up to the local public hospital they have always been great with him with almost going straight through each time.

I guess I am after opinions as to whether people in similar situations have thought it was worth getting the cover and the major benefits if so? Obviously for any 1 off larger expenses (eg big dental bills that come out of nowhere) having the cover would reduce our out of pocket greatly, making that $1800 payment more worthwhile too.

Essentially though, do people see the value and why of spending an extra $1800/year on private health cover? Our major driver towards getting it would be the peace of mind that if anything was to ever happen with one of our kids and they needed surgery or something they would avoid any long waiting lists or anything where they would otherwise be uncomfortable and in pain having to wait a long time through the public system, but we are wondering if that is even a thing or just something we are imagining, given our experiences through public have always been very good to date?

Thanks in advance for your thoughts and comments

Also - for tax purposes it doesn't seem to make a difference as we earn under $180,000/year as a family so there is no reduction in Medicare levy to take into account or anything

Financial Health Insurance Insurance

Comments

  • orangetrain on 25/05/2021 - 10:06
    +2

    Long waiting lists? For what? Heart attacks? Cosmetic surgery?

  • Duckie2hh on 25/05/2021 - 10:06
    +3

    Yes, you never know when you may need to go with a private surgeon. If you or your partner break a hip or need a joint replacement, it could be years on the public waiting list.

  • tsunamisurfer on 25/05/2021 - 10:19
    +4

    Insurance is one of those things that is useless until something happens and you need it.

    We are around that amount out of pocket as well and we just cop it.

  • Hithere on 25/05/2021 - 12:06
    +3

    https://forums.whirlpool.net.au/thread/96yzzn5z

    You got some good answers there DwightKSchrute

  • Drakesy on 25/05/2021 - 13:19

    Private health waiting times are a scare tactic to prop up the two systems approach to healthcare.
    Canada demonstrated that there is no benefit in terms of quality if you pay for it vs under the public health system, similar with Australia.

    Yes you might have that 1 in 100,000 chance of catching that rare disease but at the end of the day they've done the numbers and the companies all end up ahead. The only reason is to dodge the lobbyist gravy train that is the medicare surcharge for over $90k. But then again in a family you'd probably have a bit more of a reason to use it.

    Premiums are going to keep increasing disproportionately to inflation due to our aging population as younger/fitter people are stuck funding the older pensioners who tend to use the services more often. It's a cash grab on the working upper 20% of Australia, while the private health companies run all the way to the bank with huge profits.

  • [Deactivated] on 25/05/2021 - 13:32
    +1

    Private health insurance is a scam and should be abolished. I sound like a broken record the amount of times I've had to say this.

  • ErlichBachman on 26/05/2021 - 11:41

    Thanks for the replies guys

  • CheapskateQueen on 27/05/2021 - 21:53
    +2

    I've said this a few times on here.

    for a long time I didn't have PHI because I believed if I needed an urgent surgery, I'd be covered under the public. If I needed/ wanted elective surgery, I could just get PHI then and wait the year… it's elective after all.

    What I've learned from unfortunate personal experience is that there are a lot of surgeries that fall in a massive gap. Surgeries that aren't emergency and would need a decent wait in the public health system but need to be done as high priority/ high risk if untreated, and so can't wait the year. I've also learned for more complex surgeries or newer technologies, not all hospitals have the same equipment. I've also learned that Medicare doesn't offer all surgical options.

    Still, for most young healthy ppl, I don't necessarily think getting PHI should be automatically considered necessary. It also infuriates me that out of pocket expenses are still so high, even with PHI.

    I'm also a big advocate for using the public health system for births, even if you have PHI, cos the out of pocket cost of going private is stupid (unless you have special circumstances/ issues).

    I'll give you an example. I needed neck surgery. In the public health system, I could get a 2 level fusion. or I could get a 1 level fusion and 1 level disc replacement. Disc replacement is comparatively new and Medicare does not cover 2 level disc replacements yet. My specialist recommended 2 level disc replacement for a number of reasons including improved quality of life, reduced long term risk of future issues at adjacent levels that often happens with multi level fusions. He said I could do the dual option if I wanted in the public system.

    Which would you choose? Free but inferior surgery in the public system or $15-20k out of pocket even with private health insurance ($50k
    without it)

    • ErlichBachman on 28/05/2021 - 19:35

      Thanks so much for sharing. Such a flawed system when even with insurance you can end up so massively out of pocket still though, it's ridiculous. Those sorts of figures would be out of reach for most people

  • Zippy7 on 28/05/2021 - 22:54
    +1

    My experience.

    A few years ago, I broke my leg playing footy with no PHI. It was complicated and I needed surgery for a pin/plate.
    In the public hospital (probably during surgery, but could've been anywhere there) - I got a staph infection, so had a lot of antibiotics.
    Because of the infection, I had to have a second surgery to remove the pin/plate after the bone knitted (8 weeks?)
    Even after this, the infection did not go away, so I went back to hospital to go on intravenous drugs to get rid of the infection.
    I had to rely on the public system, I didn't have any choice.
    All the time I spent was in shared rooms - 4 men, 1 toilet and shower. I can assure you it was Nasty.
    Most other men snored and sleep was terrible. One bloke even passed away when I was there.
    Overall I felt the treatment was "average" at best.
    In general, the nurses are nice, and they do their best, but they are understaffed.
    Also, I still had plenty of out of pockets - physio, equipment rental, meds, supplies, etc.
    I've got PHI now, and I did need to have other/different surgery with it.
    Sure, I still had out of pocket, but I got to choose the surgeon, which hospital, and when.
    Room was comfy, and I didn't have to share. Food was better too.

    I figure it's a bit like car insurance. Hope you don't need it, but if you do, then feel comfortable it's being covered.

    • ErlichBachman on 31/05/2021 - 09:55

      Sounds hectic, hope you're doing better now

  • ErlichBachman on 31/05/2021 - 09:55

    Thanks again for everyone's time and replies here

    We've decided to play it safe and get it. Will reassess in a year or so

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