What am I really risking by not having Health Insurance?

In Australia, the healthcare system is primarily funded by the government through Medicare, which provides access to a range of high-quality (and free) medical services as a public patient. Naturally, this poses the question for many of why would they need private health insurance at all?

In this blog, we will explore some of the risks and limitations of solely relying on the public system and why private health insurance may be a good option for you.

General every day Health and Wellbeing management

While Medicare covers many essential services, it does not cover everything, and patients may find themselves paying for therapies, medications, and preventative health measures. These costs may be unavoidable and can accumulate quickly, especially for families or individuals with chronic health conditions.

Extras insurance, which operates like a subscription for health services, helps subsidise the cost for many health related services that aren't covered by Medicare - such as annual dental check-ups, purchasing prescription glasses or treating physical ailments (e.g. physio, chiro, remedial massage).

Longer Waits for Elective Procedures

One of the most significant drawbacks of relying solely on the public healthcare system is the potential for longer wait times for elective procedures. Public hospitals often have a backlog of patients, leading to delays in receiving necessary surgeries or treatments. Priority in the public system is given to those with more urgent needs. In NSW, 50% of patients have to wait longer than 10 weeks to be admitted in the public system.

For those with private health insurance, elective procedures can be scheduled more promptly, allowing for quicker access to care. Without insurance, individuals may find themselves waiting months or even years for procedures that could significantly improve their quality of life.

Less Choice When Going to Hospital

Another limitation of not having private health insurance is the limited choice - whether that's the hospital or accommodation. In the public system, your hospital will assign your specialist and you'll generally share a room with other patients. Private health insurance allows individuals to choose their hospital (normally with a private room) and doctor, providing greater control over their healthcare experience.

The Medicare Levy Surcharge Tax

For higher-income earners, not having private health insurance can lead to additional financial burdens in the form of the Medicare Levy Surcharge (MLS). This tax is imposed on individuals and families who earn above a certain threshold and do not have private health insurance. The MLS can significantly increase the tax liability for those who opt out of private coverage, making it a financial incentive to consider investing in private health insurance.

Larger Future Health Insurance Costs from Lifetime Health Cover Loading

Finally, not having private health insurance can result in larger future health insurance costs due to the Lifetime Health Cover (LHC) loading. This policy encourages Australians to take out private health insurance early in life. If an individual does not have private health insurance when they turn 31, they may face a loading fee when they eventually decide to purchase a policy. This loading can increase their premiums by 2% for every year they are over the age of 30, leading to significantly higher costs over time which may, ultimately, price you out of private hospital access forever.

Speak to one of our private health insurance experts today to find the right solution for you.