Without doxing myself, I’m a somewhat healthy person that’s under 25.
Wouldn’t the optimal play be just get a decent extras plan to cover optical and dental cover?
And unless you earn over $93k for Medicare levy then just opt in for Medicare
As private would cost $100-$150 a month easily with seemingly little benefit for those that are younger and highly improbable that you’ll need a knee reconstruction covered anytime soon.
Interested to hear thoughts.
Haha, touché
Yes. Effectively, all private health insurance statistically is not worthwhile as the whole premise is the company makes money from you over time. That is how any insurance works.
It's worthwhile due to incentives the government gives like the Medicare levy or loading at 30. Or if you just want peace of mind/don't have the money to cover any health issues.
The only thing with PHI is that the government subsidises it as well. The weird part is that the less people who have it, the better it gets because the government is paying a greater portion of the cost compared to what each individual pays. It's a stupid system.
But even the loading isn't a good enough reason to get it, I'm going to wait until 50 and wear a decade of 40% loading. Versus paying 20 years of paying full insurance that probably won't be used, my home loan will be paid off by then and hopefully I'll be on a higher salary.
Worth doing the numbers as well.
My PHI is ~$1500, but the Medicare Levy Surcharge is much more. So it's cheaper for me to get PHI than to pay the MLS.
Medicare Levy Surcharge is much more
Funniest thing is I am sure most people here talk about what they buy and invest because they are on like $250k pa but they don't know about MLS.
Yeah, usual rule is MLS is more than PHI, so buy the "bronze" plan - i.e. the tax avoidance plan. Which again points to how stupid the system is, we could just fund public health properly and tax people to pay for it, instead of inventing a tax to boost a broken private health system.
@freefall101: I know it makes sense for me financially in my head, but my conscience says pay the tax and some poor sod out there will have a free operation in the public system on my dime.
Makes more sense than lining the pockets of some PHI CEO to buy a third yacht.
@freefall101: I have not had a single quote where PHI is cheaper than the MLS. (I am 39 and have never had PHI )
For me I feel that if I were to get PHI for tax benefits, wouldn't it be better to salary sacrifice and other tax benefits so I actually feel like I'm 'getting something'?
@klonky: No, because salary sacrificing doesn’t reduce the income test for MLS.
Always needs to be reviewed by individual, but I was speaking generally.
MLS is much more if you're 25. Not if you're 50+ and never had PHI.
I reckon you need to decide when you're young whether you're going to PHI or self-insure, and stick with it.
Sounds like what my mum did. She didn't get PHI until she was 60 years old and even with the 40% loading, she still comes out way ahead compared to paying 30 years worth of premiums.
Well, that's by not using PHI till 60..not everyone is that lucky
@May4th: Yeah everyone forgets this part…
Trust me if you end up going to hospital for something you'll find yourself wishing you had PHI
Yeah I recall seeing a comprehensive comparison about when the best time to get it is in regards to bang for buck long term, and the sweet spot was around 45 years old.
Obviously your income is relevant in the equation, but in general, it's around 45.
You forgot the Health Insurnace Rebate
i have private health insurance due to my income and the levy, cheaper to pay health insurance than the levy for me. in 40 years have only used the cover once for an operation, rest of the time use public hospital and tell them i’m uninsured, and don’t pay anything in public hospital. i cover my dental out of my wallet as my dentist doesn’t take health cover.
Have you looked at other options to reduce your MLS surcharge such as working part time or after tax super contributions?
A few people on OZB will say it is a "scam".
*The majority of people on OZB will say its a "scam."
Because it is, you can't beat the actuaries.
Its risk mitigation not a scam, yes ideally you never need to claim and lose out financially. For some that means it is not worth it, for others it is.
Actually, it's risk transfer, and that's a scam in my book.
The only way to win with insurance if for something terrible to happen to you. Not a game I want to play.
@SlickMick: So you prefer when something terrible happens to you that you also lose your house, savings, family etc. It is a choice, you are effectively self insuring. I wish I was rich enough to do that myself.
The only way to win with insurance
You aren't suppose to win. Ultimately you are paying for peace of mind.
I've seen enough people in my time have something terrible to them and insurance has saved their quality of life or sometimes even bettered it.
@SlickMick: The way to 'win' with insurance is to never need it.. If you feel ripped off then lucky you
It's meant to be a safetynet for a catastrophic event, at the expense of a minor nuisance / one less meal out month
Because it is a scam.
People are forced into having it because you have to pay more tax (Medicare levy but essentially the same thing) if you don't. You are also penalised if you don't join by age 30 in the form of higher premiums for 10 years. Just another John Howard legacy.
People are paying a lot of money into these funds, money which if directed to public health rather than the profits of private health funds would see a much better public system and no need for these funds for the majority.
Oh and the cover itself isn't that good anyway. There's a cost you have to pay yourself on most things including hospital stays. The extras cost as much to insure as the benefit they provide in return (I checked this over several years with my own health fund).
There's a cost you have to pay yourself on most things including hospital stays.
Often the excess is $500 no matter the length of stay. If you end up in hospital for weeks and it is a private one and you have no insurance, you'll be charged 10-20k most likely.
It depends. We had it because we were married, 2 incomes, had a child and had health issues from work - all in our 20s.
If that's not you - stay under parent policy where possible.
If not possible, at least have a policy that covers your level of activity and stupidity. The largest injury for young people are orthopaedic - knee, ankle, shoulders etc usually through sports. Being fit and active can kill you. 🤣
Too many sporting injuries either on the field or at the post games drink session. If you cannot stay under your parents cover and can afford to wait in public hospital queues ……..however do you feel lucky?
If you're unlikely to use it then you're just wasting your money and subsidising the old people that do make good use of it.
How do you assess the likelihood of you having an accident or medical emergency or condition with a long public wait? Such weird logic. I suppose all insurance is a waste?
If you just sit in your room playing video games then you'll be unlikely to have an accidental. If you're into extreme sports where you are likely to have an injury you may get good value out of it.
Actuaries have already done that for you, statistically you'll still lose if you take out insurance.
If you have a certain health condition, or the public health system has an issue with treating that problem for whatever reason, then private health would make sense if you can afford it. In some regards, in some situations, the public system is (profanity) out of the arse.
Optimal play is not to bother until the year you turn 31.
this, your junk policies won't cover or won't be needed for the things you most likely will end up in hospital for anyway - eg. fractures/trauma/acute illnesses for which medicare will cover.
it's mainly a financial consideration with avoiding MLS/lifetime loading, just start buying when you turn 31
If you are healthy, I can't see how it's worth it. You have to pay a gap most of the time anyway, on top of your premiums. I choose not to get it, and then just pay out of pocket if I need/want anything done. Pay less overall than with private health, buy you still get to have surgery when you want rather than waiting.
You are confident you can foresee all injuries, accidents and emergencies, cancers and genetic conditions? Insurance is for unforeseen events. Using the logic on this page all insurance is a scam.
You do know about Medicare, right?
The level of care you get is not the same.
@ddilrat: I'd prefer public for cancer. I don't need someone to bring me cucumber sandwiches at that point, I need people with training and equipment.
@ddilrat: Its actually better in a lot of cases. Private hospitals do not have the facilities that large public ones do.
@ddilrat: What are you even talking about. Those are things you have done at a private hospital. I recently had a couple of procedures done in a private hospital, if I got cancer I would still go public.
@brendanm: I'm sure purely cosmetic surgeries like you mentioned are still not covered by most PHI. What are you even on about….
@brendanm: You're talking about private health insurance. Getting a nose job, a tummy tuck, calf implants, penile enlargement etc at a private hospital is not what your PHI is for
@ddilrat: I went to a public hospital as a private patient for my treatment. I found one of the best surgeons in the world and he operates in one of the best public hospitals in Australia. The private hospital across the road didn't have anywhere near as good facilities and staff that were needed to keep me alive post op.
I work for 5 hospitals and the biggest issue with private hospitals is most commonly the nurse to patient ratio in the ward. Like 1:4 in public and 1:10 in private. Surprisingly a lot of nurses don't want to work private because of worse working conditions among other issues like aging buildings and equipment. Private hospitals are under else scrutiny to keep things updated than public.
When I was a private patient in public I had 2 nurses on either side monitoring me in ICU and 3 nurses (1 training) for 4 patients in the ward. With PHI no out of pocket expenses (saved 20k+) and the option for a private room (when available).
In an ironic world, the ironic response becomes the correct thing to do!
If they are going to design a system, where they are counting on a person's "self-centred interest",
then do the opposite and avoid PHI, to keep alive the Medicare system for all to benefit from and for future generations.
It's an ideological position to take.
It's a 1st world country, with a great medical system, that will erode away, if we just look at our own "self-centred interest".
As a 'young, fit, healthy person', I had PHI for more than 10 years and saw all that money "wasted",
because I was only getting ambulance cover and I wasn't paying enough cover
to have those optional checks of dental or physio,
and paying gap means you're still out of pocket anyway, so I just cancelled PHI altogether.
Besides, the whole pharma medical industry gave such bad optics during c*vid in the last few years,
that they don't need more money from me, just to boost their CEOs and for shareholders,
and private corporate interests end up eroding a great country
to become an American system.
So I prefer to keep funding Medicare.
Medicare, NDIS, aged pensions. All are unsustainable long term. When something is given away free, there is no incentive to save costs and the budget gets blown out.
Even with subtle changes, the incentives change. How many ppl have avoided a visit to GP to get a doctors note when they know they have to pay a $40 gap due to a sniffle/cough?
Or due to NDIS, I can get a free ipad when I wasn't planning to buy one anyway
All are unsustainable long term. When something is given away free, there is no incentive to save costs and the budget gets blown out.
Like I said,…it's an ironic world, so the ironic response will be the correct response.
The bio-pharma industry also works like a big cartel,
and they strong-arm the government (ie. the people's representatives),
just like every other cartel (banking, real estate, toll road operators, energy companies).
What's left for the people to be entitled to,
if a person's own health has become a business ?
@whyisave: The world works on incentives. Without copyright, without trademarks, without patents then whom in their right mind would invest millions or billions of dollars to see someone just take your IP away.
@Sweetnsour: Nearly everything we see around us,
has been left to us by dead people.
People who just want to better the world.
The copyrighters stand on the shoulders of the copylefters.
If there was copyright, then AI wouldn't be where it is today,
because all those large language models, were scrapped off
and processed with disregard for patents, copyright, etc.
Innovation prospers when there're less restrictions.
See,…the ironic world we live in!
An example is Linus Torvalds sharing his creation to the world.
Investment doesn't always need to have a direct return to oneself.
You can invest in your children, so that they will produce better grandchildren that you may not meet.
It's a different paradigm to think in this way, because this is a very pro-capitalisitc & individualistic way to think of investment, but yes…capital rules this mordern world and capital = money.
Steve Jobs got the fame, with Apple,
but Wozniak is a quiet achiever too,
and the Apple systems are built on BSD and C programming languages,
whose inventors get no recognition,…and then there are centuries of human innovators that
has contributed to where we humanity is.
Some things like health need to not be viewed as a business, and it should be sacred.
Some things like health need to not be viewed as a business, and it should be sacred.
Yet all the advanced healthcare is from corporates in western countries. Socialist/Communists countries like China, Vietnam, Russia are the last to innovate and rely on stealing iP. They stand on the shoulders on where the investors are, where the best paid doctors/scientists are. New drugs/treatments is due to risky investments from private sector not from government money which you are suggesting. Inventors need investors to turn ideas into reality. These risk takers are whom we are thankful that we are living longer. These advances trickle down to poor countries over time. So in an ironic way, love it or hate we are enjoying their fruits.
It depends.
On your income.$93k means you don't make the $97k+ for singles that will cop you 1%. If you are unlucky to just end up on $97k then it is $970 in MLS.
Then you have to look at what you get out of it.
Say $100 a month is $1200 a year. Ambulance insurance is like $100 a year, optical you can claim $200, dental $300. That is $600. So $1200 - $600 = $600 - $970 MLS then you are in front by $370.
I used to get AIA vitality at one point. The gym subsidy was the clencher (if you went to the gym regularly) and the gym had a pool so I ended up saying $15 a week pool costs.
optical you can claim $200, dental $300.
That's extras cover. Hospital cover is required for MLS exemption
Yes, but there is little point in buying hospital only vs hospital + extras
As a family we bought hospital cover only $200pm. Hospital + Extras $260pm. $1200pa for dental, $400pa optical total. Just these two makes it worthwhile to pay the $60pm extra.
little point in buying hospital only vs hospital + extras
Depends why you're buying hospital only
If it's purely for mls exemption then that's significantly cheaper than a usual hospital + extras plan. Definitely much more than $60/mth
So, yes, if you want full featured hospital cover there's reason to also include extras. But if you don't want full featured hospital cover, then there little reason to also include extras :)
Depends why you're buying hospital only
No point arguing with geniuses like you.
I was on the HCF hospital only and it was $190 per month to escape MLS for a family.
Moved to Latrobe and paying $260pm including $1200 for dental and $400 optical. Live in Victoria. You like most geniuses think people are talking out of their back side.
Does the MLS apply on $93,001 or $97k+? Sorry, that part threw me off. It caught my attention cuz I'll be making just little bit over $93k this financial year (I don't have PHI) and am mad that I'll have to pay MLS for just a few hundred bucks over 93k. Wouldn't mind if I made over $100k, as that would also have put me in the next tax bracket for the new Stage 3 Tax Cuts.
Gone up in 2024-25 ATO link here
There is also the 31+ lifetime health care loading. So depending on whether you think you can get away with not having private health care for life ATO link here
So in the current financial year (2023-2024) I'll cop the 1% MLS with an income of over $93k. Got it. Ta
And too late for LHC loading. Getting PHI now will cost me a lot (15 years too late), so I would rather cough up the MLS.
I know people won’t like this, but it’s a scam. Rather spend money in keeping yourself healthy.
Some people need a motivated health professional to tell you how to keep yourself healthy.
Tell that to cancer because sometimes there's absolutely nothing you can do to prevent it. Fortunately PHI has been worthwhile in my case and they've paid out tens of thousands that Medicare wouldn't have covered.
We are having the same experience. Fit, great diet, seemingly healthy, and got hit with a double cancer whammy. Thank goodness for health insurance.
I’m exactly the same - healthy but hit with cancer (literally had little to no symptoms). just about 70% through my treatment and HCF has already paid out $36k…. So has it been worth it after 30+ years membership with hcf? Yes and no.
Now having gone through the health system I understand how cancer is treated and tbh this country is amazing in that Medicare would pay entirely for my treatment anyway. So have I really needed private? No, but it got me treated and diagnosed FAST. In public I’d hazard a guess I would’ve been delayed up to a month. I’ve been in private hospital rooms which are amazing (I’ve heard the public ward in my hospital is also actually pretty good though) and even with very life threatening complications I’ve received everything and anything I need immediately.
I always used to whinge endlessly about my stupid HCF premiums when I was so healthy that for 10 years I barely used $400 benefit a year for a $2000+ p.a premium and to an extent I think if you put away the money in your own insurance account and invest it yourself you’d be net net same result but it’s so hard to crystal ball this and know if your future health needs will require 100k or 20k or some number in between
Rather spend money in keeping yourself healthy
I didn't know it was mutually exclusive.
I can eat less garbage food, money saved and keep yourself healthy.
And just like car or home insurance, you can go years or decades without a claim, then a surprise event occurs that could financially ruin you if you didn't have that insurance. Are you feeling lucky?
Further … I've just had my own recent health shock, involving two public hospital visits by ambo, then a transfer to a private hospital for an implanted heart monitoring device, all totally unexpected. Dunno where this is going healthwise, but I'm glad I'm well past any insurance waiting periods, just in case
Without doxing myself, I’m a somewhat healthy person that’s under 25.
Too late, you've given us too much already
Besides age, there’s been no other identifiable information given , even with previous posts you could deduce I’m under 25 that likes orange juice and curious about health and extras 😹
Probably like burgers, fries wings and cats.
Nah, we got you sussed, Robert.
Think we got the wrong name? Well prove it by posting name, DOB and a picture of your driving licence.
Yep, it's a lobbyist fuelled joke brought in by the lovely liberal government.
basically another wealth transfer from those trying to get a leg up (younger people) to the elderly who need subsidised healthcare.
if they didn't bring in the lifetime healthcover loading my impression is the PHI industry would be much smaller and everyone would benefit.
I'd much rather get slugged another $1000 and send it into public healthcare than give it to an insurance company.
If you're under 30 or earning less than $93k AND don't have a family don't bother.
If you're in one of the above, churn the shit out of the joining bonuses and cashbacks.
*lifetime loading is only 10 years
I have no idea why this is getting negged when this is literally the right answer.
The only reason the vast majority of people get PHI is because it often works out to be pretty much equivalent to the Medicare Levy Surcharge (MLS).
The MLS is practically a "soft" government mandate to buy PHI, which (for the vast majority of young people) is of negative value (meaning that you pay much more in than what you would expect to get out from claims), particularly when basically that is not purely elective surgery is already covered by Medicare. All the MLS (and lifetime loading) does is force younger people to sign up to PHI to subsidise old people.
I understand the argument that PHI takes load off the public system, but it just seems counterintuitive that we have set up a whole bureaucratic, inefficient private system to just take load off of a stretched public system, where instead, we could just take less money from people to properly absorb all of that activity into the public system.
Source: Was an actuary in a past career / life (not in PHI specifically, but I have a deep understanding of insurance broadly).
Most people seem to ignore the fact that extras insurance should also be viewed as "insurance" to cover unexpected costs in the event of the unexpected.
Extras is pretty much a scam for most people (other than those who have done the maths and it works out for them).
Most people do not need new glasses or major dental care every year (which are basically the only two valuable components of Extras).
Depending on how you feel about pseudoscientific witch-doctoring there are a bunch of other things covered by extras that you might find valuable…
i would highly recommend putting the $100 a month aside in the event of an emergency and you need to fork out heaps for medical costs.
I have always had health insurance but I need glasses and tend to go to the dentist every 6-12 months and get a filling every year or 2 and also use the massage and chiro extras, so it has been worthwhile for me.
$100/month savings won't go far towards a private hospital bill
My biggest medical expense was ~ $10K, and it's only happened once in decades of theoretically accumulating $100/month.
Personally, I'd go with the $100/month over insurance - especially if you store it in ETFs or something.
check out Extras cover
do the math
it may be worth it
if you earn over 93k yes if you can get cover for <1k which is the MLS
even if you don't, you need to consider lifetime loading, in the event you do earn over the threshold later in career, if you want to take it up then over age of 31 you will pay extra to catch up
so unless you earn significantly under MLS threshold your entire career it's usually worthwhile to at least buy the cheapest junk policy that exempts you from MLS - this is unfortunately the way the system is set up to be
Extras may be worth it - calculate how much you will actually use (not 'would' use) and go from there.
I have extras because it actually encourages me to go to the dentist regularly, so spending the money on it each month is worth it for my dental health haha.
Plus I use the remedial massage and physio benefits, and when I do need a new set of glasses that aspect comes in handy.
I get hospital cover because I do sports that could result in accidents that cause muscle tears/joint/bone breaks, and knowing a few people that work in the local hospital do not trust the public surgeons to reattach any muscle tears - so for me that peace of mind is worth it, too.
Only thing I’ll add in what addition to what others have already said is if you play sports like soccer, basketball, footy, skiing etc it may be worth it as if you bust ligaments in your knee, you’ll have a long wait in the public system but be able to get it quickly in private. Sure you can also pay for the surgery, theoretically with the saving you’ve made by not paying private health, but inevitably most people don’t do this and don’t have the cash that they are willing to spend at the time they need it.
I have an extremely sedentary lifestyle , so if I played sports where some sort of injury is inevitable then I’d get it
Just letting you know, the sporty life might entail some injuries, but increases life expectancy.
Your extremely sedentary lifestyle suggests lots of medical attention later in life.
Sedentary lifestyle with daily 2-3km walks is fine too.
I'm sure, there'll be a time, where it will be compulsory to carry a GPS tracker,
which tracks our mobility and in turn, will reduce our insurance premiums.
I knew of some PHI apps that already started this,
ie. GPS tracked and/or counted steps to give discounts off an insurance policy.
…You can still go into private, just won't get the surgery for free.
A lot of the time if you're burning $1500 a year on PHI you'll be better off going private in the long run and not paying for insurance.
Yeah, agree, there’s been studies that show on average you’re best off without. However this relies on you having the means and willingness to pay for the surgery if it arises, which often human behaviour prevents.
Going by your username I don't believe you🧐