Health insurance is the final frontier for many adults – once you’re familiar with health insurance, you get your Adulting Diploma.
We’ve partnered with CUA to clarify some info around health insurance.
In saying that, it’s last on the list of things to do for 20-somethings because certain health insurance benefits are awarded to individuals up until they’re 31, so if you’re 25, you may feel you have all the time in the world – despite Australia’s hospital admission rates increasing by 3.8% between 2017 and 2018.
Australians’ basic needs are covered by our universal health care system, Medicare, so the urgency to pay for something we don’t necessarily need sometimes just isn’t there — however if you decide not to purchase private health insurance, you’ll miss out on handy perks like private hospital rooms, cheaper optometrist visits, remedial massages, immediate treatment and even money to cover dentist appointments.
So, what exactly should Australians know about health insurance in order to make an informed decision, and how do things change after you turn 31?
People aged 18-29 can often receive discounts
If you shop around, you’ll notice a recurring trend – many health insurers offer discounts to those under 30.
The premium amount is usually dependant on a few factors: the state you live in, your earnings, age and the cover you want. Discounts are also available if you are between 18-29.
I got a quote from CUA’s Health Insurance page and, after filling out my details, discovered I was eligible for 4% off the full price of hospital cover due to my age.
You can save more money if you remove certain types of cover
After receiving the Under 30’s quote, it became apparent that you had more options to further whittle down the quoted price.
FYI: extras cover refers to treatments outside of the hospital, such as dental, physiotherapy, optical etc.
The age bracket runs deeper than discounts
After you turn 31 (well, the first July following your 31st birthday), health care gets significantly more expensive without hospital cover.
Specifically, you’ll need to fork out an additional 2% for every year you don’t have hospital cover over the age of 30. So theoretically, if you decide to change your mind when you’re 35 and invest in health insurance, you’ll need to pay 10% more than those who bought it when they were 30.
Private health insurance is a good tool if you earn over $90k
As previously stated, health insurance isn’t something that Australians need to purchase but it can be financially beneficial to have it.
Without health insurance, Australians still have access to health care — this is funded by both the Medicare Levy, whereby Australians pay 2% of their taxable income to cover health care costs, and the Medicare Levy Surcharge, which requires that any singular individual earning over $90,000 pay an additional 1% to 1.5% of their income if they haven’t purchased health insurance.
So, if your income is over $90,000, it might just be in your best interest to invest in health insurance.
The overall decision is entirely up to you
Whether or not you should invest in health insurance really comes down to your own personal desires.
As well as the financial rationale for individuals earning over $90,000, some Australians purchase health insurance because it grants them a shorter wait time than the public system. That’s not to say you’ll be waiting longer than someone with health insurance for an emergency operation, but in regards to elective procedures, the wait time varies on whether or not you have health insurance.
You get to cut the elective surgery line, so to speak.
Remember, the list of other perks is extensive: health insurance can also give you access to private hospital rooms and can allow you to choose your own specialist or hospital, plus you can be comped for your glasses, dentist appointments, and remedial massages.
That’s stellar news for anyone who has seen the inside of a public hospital even once.
So, whichever way you slice it, you’re going to be given far more options if you invest in health insurance and even more options on top of that if your policy includes hospital and extras.