Question for the Australian Mustachians - Private Health Insurance!

[kjulez_83]

Hello fellow Aussie Mustachians (and anyone else who might be reading this)!

My family of 4 currently has mid level private health insurance - hospital cover only.

I am really wondering if it's worth it. Right now it may be worth having as our combined income is right around the $180K and so the 1% levy would be about $300 less than what we currently pay of around $2,100 per year (actually it's probably a bit higher because we earned more than expected and had to pay some more money at tax time).

But we are hoping to FIRE in about 3 years time at which point approx $2,500-$2,800 per year (who knows how much it will be by then!) will be a big chunk.

I was reading an article that talked about how you are pretty well covered for emergencies and cancer treatment and people report receiving good care in the public system - commenters said yeah but if you need cataract treatment or a hip replacement you'll be waiting for ever. I just checked and my mid level hospital cover does not cover joint replacements or cataracts!

So I don't really know exactly what I am paying for. The chance that if one of us does need to go to hospital for treatment we get a private room? Big deal! It seems like medicare covers most of everything else anyway.

After some thoughts & opinions please. Thanks heaps!

PS if there has every been any discussion around this please link me to it if you know of it, I am not having any luck with the search function. Cheers!

[Spiffsome]

I am Australian, 35 y/o, married, no health insurance. I pay cash for the occasions that I do need something more than a GP visit. I get some strange looks from my dentist when I do it.
I had two turning points on my decision:

1. When I had to have my wisdom teeth surgically removed - my parents' rolled-gold blue-ribbon health cover ended up covering about $4K out of $10K in expenses.
2. Reading an article in the Courier-Mail (yeah, I know) where a private health insurer's representative basically said that health insurance was more expensive than the health care it would cover but people couldn't save up the money.

Having said that, I know that I'm gambling to avoid a catastrophic health issue and that due to health & age I'm on the good side of that bet. I've also seen people relying on the public system wait for years for elective surgery. In your situation, I'd have up to $30K to cover expenses of any elective surgery but forego the insurance.

[marty998]

So I don't really know exactly what I am paying for. The chance that if one of us does need to go to hospital for treatment we get a private room? Big deal! It seems like medicare covers most of everything else anyway.

A private room is very helpful if you are having medical care for various things of a personal/private nature.

Like bowel or kidney problems.

It's also good not to have a public room if your kids got sick or needed care. You may think the 8 year old stranger sharing the room is harmless, but what about all their visitors?

[htg123]

Well it all depends on whether you FIRE income makes you liable for the MLS....in regards to public health, so long as nobody has a serious ongoing illness, you're better off just paying the out of pocket costs for stuff as it comes. For dental, look into smile.com.au but do some due diligence before buying it. There's good and bad reviews.

[kjulez_83]

Thanks for the opinions guys!

Knowing me I will just stick with it until one day I get fed up and cancel it and then like 3 weeks later I will need it!!

Post FIRE income would definitely come in well under the MLS!!

For dental I don't have extras anyway the extras I had covered like $1,000 per person of orthodontics as a lifetime limit. What is the actual point of that??

Need to think a lot on this one I think, in reality if I can keep it in the post FIRE budget (which I'm pretty sure I could) it would be best to not gamble with our health!

Cheers

[Bee21]

It is an ongoing dilemma for us. We use the extras to the max, but i am not that happy with what they actually cover if you need surgery. Not much. Last year my surgery cost us almost 3k out of pocket and medicare covered a larger part of it than the private insurance. Go figure. I was so pissed off that i wanted to cancel straight away. I gave birth in the public system because i found the out of pocket costs associated with private childbirth outrageous. Yes, there was the homeless drug addict woman in the next bed, but everything else was ok. And i hate the fact that if you see a private doctor in his office and not in hospital, that is not covered. A 15 min consultation with a pediatrician cost us 300 dollars, and again medicare covered some of it, medibank 0.
 Every year i ask them to add up what they spent on us, and we are sort of breaking even, but i can't say there are many benefits in having it. When we will need extensive dental work done i am definitely going overseas.

[pancakes]

I was reading an article that talked about how you are pretty well covered for emergencies and cancer treatment and people report receiving good care in the public system - commenters said yeah but if you need cataract treatment or a hip replacement you'll be waiting for ever. I just checked and my mid level hospital cover does not cover joint replacements or cataracts!

This is not entirely true. For common cancers and illnesses yes but there are some rare serious illnesses for which Medicare does not recognise the treatments and therefore private is the only option. I have a friend who went through this with a rare cancer and he was fortunate enough to find a surgeon who would take him on as a private patient at no cost. His family were still out of pocket a large amount in travel (the doctor was in another state) and hospital fees. There were no treatment options for him with prospects of a cure in the public system, just a road to palliative care.

Keep in mind also that you don't need private insurance to use a private hospital. The cost of skipping the wait and having cataract surgery as a private patient without insurance might not be so bad vs years of top level cover premiums for a family.

I am fortunate that I have a close family member who works in the medical field and who gifts me top cover private hospital insurance. Seeing my friend's experience first hand I do think it is a risk to go without it however his situation would be incredibly rare and unlucky.

[kjulez_83]

Last year my surgery cost us almost 3k out of pocket and medicare covered a larger part of it than the private insurance.

That's what I keep hearing & reading about! It just seems so ridiculous!!

I gave birth in the public system because i found the out of pocket costs associated with private childbirth outrageous. Yes, there was the homeless drug addict woman in the next bed, but everything else was ok.

Lol. I mean I feel sorry for the drug addicted homeless lady and her child but just your comment sounds funny - I bet that would have been quite the experience! I went private and I think I paid about $5,500 to basically be able to go and stay at the Grand Hyatt for two nights with nurses in attendance. I really can't remember too many any other benefits (private room was good - but again it's for like 1 or 2 nights!), my actual OB did not attend either of my two births!!

[kjulez_83]

I was reading an article that talked about how you are pretty well covered for emergencies and cancer treatment and people report receiving good care in the public system - commenters said yeah but if you need cataract treatment or a hip replacement you'll be waiting for ever. I just checked and my mid level hospital cover does not cover joint replacements or cataracts!

This is not entirely true. For common cancers and illnesses yes but there are some rare serious illnesses for which Medicare does not recognise the treatments and therefore private is the only option. I have a friend who went through this with a rare cancer and he was fortunate enough to find a surgeon who would take him on as a private patient at no cost. His family were still out of pocket a large amount in travel (the doctor was in another state) and hospital fees. There were no treatment options for him with prospects of a cure in the public system, just a road to palliative care.

Keep in mind also that you don't need private insurance to use a private hospital. The cost of skipping the wait and having cataract surgery as a private patient without insurance might not be so bad vs years of top level cover premiums for a family.

I am fortunate that I have a close family member who works in the medical field and who gifts me top cover private hospital insurance. Seeing my friend's experience first hand I do think it is a risk to go without it however his situation would be incredibly rare and unlucky.

Firstly I'm so glad your friend was able to get the treatment he needed, that sounds like a story of both terrible luck getting it in the first place but at least a bit of good luck finding a doctor to take him on privately for free.

With a lot of things in life I tend to go with the odds and think eh what are the chances but with your health - when things go bad they can end up costing you your life obviously, but even if you make it through with your life it can cost you everything money wise too. When it comes right down to it I am pretty conservative and it just seems like there is too much at stake to not have it if we can afford it.

[Bee21]

The poor chick was not funny. 20something, no teeth. The baby boy was gorgeous, but mommy couldn't remember his name. The hospital didn't want to release him, not sure what happened in the end. It was interesting though to see how the social system works. From 8am every half an hour somebody was interviewing her very kindly and respectfully. The pharmacy to figure out what drug she was taking as bub showed withdrawal symptoms. Social sevices. Aboriginal liaison officer. The chaplain. Mental health. We left at midday so missed out on the rest.

Our doctor relatives were horrified when they found out i went public though.

The private hospital where i got my surgery done was nice, but i can't say that the very expensive medical care was exceptional.

So honestly, i don't know if private health is worth it. My main argument when husband wants to cancel it, that we don't hesitate when paying car ins, boat ins, house and content ins, so why wouldn't we fork out the money for health insurance? We are not indestructible after all.

[bigchrisb]

Private health insurance is a total rort.   My experiences have been:
- Knee reconstructions when I was still under my parents top level cover. The private insurance only covered a small part of the gap.
- Fun and games with a serious degenerative disease. Thus far this has cost about $30k in total cost, going through private care (counting full cost of medicines).  Of that, the PBS has covered the lion's share (about $18k) and medicare about $7k.  I've paid about $5k out of pocket.  How much would top level private cover contribute?  Zip.

I pay the minimum to avoid the penalty taxes and mentally segregate the balance to self fund care.  I wish that we had a sensible tax system that would allow tax sheltered self-insurance, rather than the public vampire we have of the private health insurance system. 

Let alone the social and media pressure that you "MUST" have health insurance!