Is Health Insurance Worth it?

Have you got private health insurance or wondering if you should continue to pay the premiums as they continue to rise every year?

It seems that those who pay continue to pay more and more whilst the majority of Australians have opted out due to the high costs and reduced benefits. 48.1% of Australians currently have private health insurance, the lowest figure in over a decade.

The Australian Government introduced a private health rebate back in the late 1990s to encourage more Australians to take out private health insurance to take pressure off the public health system. Medicare was introduced to Australia in February 1984 to provide free or subsidised basic health care to all Australians.

There are many benefits to Medicare but one of the major drawbacks is the long wait times for non-emergency surgery, which can often lead to prolonged periods of pain or discomfort while you wait to be treated. Of the 25 most common surgeries in 2019-20 in Australia, the longest wait time was for septoplasty (surgery to fix a deviated nasal septum), with a wait time of up to 277 days. *(according to the Health insurance comparison website)

Other treatments with significant wait times include:

• Total knee replacement – up to 223 days
• Myringoplasty/tympanoplasty (to repair a hole in the ear drum) – up to 214 days
• Total hip replacement – up to 120 days

It’s one reason why elective surgery waiting lists are a problem for many Australians without health insurance.

The main advantage of having health insurance is that you get cover for some of your healthcare expenses such as doctor’s visits, specialist treatments and choice of doctor when in hospital. Having extras as part of your cover can provide financial assistance for visits to dentists, orthodontists, physiotherapists, chiropractors, optometrists and natural wellness, as well as ambulance cover and some funds even cover gym memberships, swimming lessons and yoga classes. Having private health insurance can also mean that you don’t have to wait for a procedure, as generally there are no or limited waiting times at private hospitals. 

Disadvantages of course include the high costs of the premiums especially if you take out cover later in life with the government penalising private health members who have not had it whilst younger. Another factor against health insurance is that funds often exclude some diseases and illnesses which means the patient would have to pay for all services relating to these.

So, what’s the alternative … one idea is to put the money into a bank account so that you can self-fund your health needs. This way you have the money there to use as you choose and may actually end up being ahead of the game. You may also be able to put the money into a high interest-bearing account. Food for thought, isn’t it?

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