Private Health Insurance - Australia

[krustyburger]

So for a single tax payer, Tier 1 MLS is 1% on a 90-105K income, or $900-$1050
The cheapest junkiest policies for a single cost somewhere between $850-$1200 per year and don't cover anything really except one emergency ambulance ride.
An emergency ambulance ride here costs $949.
So I think I will continue to take my chances with fate and our excellent public health system until if and when I hit Tier 2 income (105,001 - 140k) at which point I will redo the maths.

Confusingly I think there's a rebate of 15% or so if you buy private health cover (why?), so you might end up saving a little bit, but basically I came to the same conclusion as you, I'll run the numbers again if I'm ever at tier 2 income.

[Fresh Bread]

I went to the dentist and she said I need to start planning for four crowns. I've got one particularly massive filling plus 3 others that I don't believe are really huge or critical.

On my current high cost extras package, I get $1100 towards a $1600 crown. As a Bupa patient without crown cover, I'd get it for $1600. I'm not keen to shop around - she's gentle and has small hands :)

I was on the brink of dropping my extras cover but now it seems sort of worth it if I add that $1100 to 90% back on general check ups and contacts, plus an annual podiatry visit for me (got funny feet) and a couple of inevitable physio trips for hubby (sportsing). If hubby needs a crown too it's definitely worth it.

I don't know why I'm posting - maybe to say look after your teeth!!

[middo]

I went to the dentist and she said I need to start planning for four crowns. I've got one particularly massive filling plus 3 others that I don't believe are really huge or critical.

On my current high cost extras package, I get $1100 towards a $1600 crown. As a Bupa patient without crown cover, I'd get it for $1600. I'm not keen to shop around - she's gentle and has small hands :)

I was on the brink of dropping my extras cover but now it seems sort of worth it if I add that $1100 to 90% back on general check ups and contacts, plus an annual podiatry visit for me (got funny feet) and a couple of inevitable physio trips for hubby (sportsing). If hubby needs a crown too it's definitely worth it.

I don't know why I'm posting - maybe to say look after your teeth!!

Good teeth are a good investment!  Fluoride, brushing and genetics all play a part, but without the two you can control, good genetics along don't do much.  I recently read that under half of the Australian population brush their teeth twice a day.

Sounds like the extras would be worth it in your case.  I last went to the dentist about 10 years ago and they polished my teeth and they hurt for a week.  Might go to one in the next decade...

[Fresh Bread]

Yeah I saw that study - I'm definitely one of the population brushing them twice a day. I'm a little lax on flossing. In my youth there was six months backpacking with poor hygiene and lots of lollies, which was my downfall.

[Grogounet]

I made an article on that:
http://www.quest2independence.com/finance-australia/figure-out-in-five-mins-if-you-need-private-health-cover-and-get-the-best-price-for-your-cover/

Might be useful for others
and happy to add onto the details I might have missed

[JLR]

Just paid our annual ambulance cover fee - $80.55 for our family of 5.

[Phryne]

I don't have health insurance.

I'd had basic hospital cover (left over from pre-divorce) but decided to let it drop as a matter of principle - I believe that health care should be a universal right with everyone entitled to the same quality of care.  The Medicare surcharge doesn't kick in until $180k for families so I won't have to pay it for a while, but come the day, I'd rather my money goes into the public system.

I've gone through various reports on waiting times, and they seem reasonable.  Anything serious will be dealt with immediately, and I look after my health as well as I can to try and avoid lifestyle-related illness.  If I really had to then I'd pay, as I do for dental, optometry, psychologists, OT etc.  I suppose I could live to regret it, but I've made my choice and will take my chances.

What Australia needs is a public holiday to celebrate Medicare!

We’re in a similar boat, we previously had a junk policy to avoid the surcharge, but it annoyed me paying money to an insurer for nothing (or worse, their annoying advertising) & on my high horse I decided I’d rather pay it in tax (to be fair the difference was fairly minimal). We both wear glasses, but I could never make the maths work on extras (particularly when damage is covered under our home insurance.
I had an accident & smashed my two front teeth and paid the $8k out of pocket. If I *had* extras (at the time) I would have received $1000 a tooth, because it was considered cosmetic. Crazy!

[middo]

Adding to the anecdotal nature of this thread:

My daughter broke her thumb playing sport, and required a screw to be inserted to to stabilise the joint and allow for full movement.  She is 18, and a dependent living interstate at uni, in Adelaide.

She went privately at a sports medicine clinic/hospital, with a well credentialed doctor performing the operation.  We paid:
$100 for the doctors
$170 for the anesthetist
$180 for the OT who set the hand in a cast three times as swelling reduced.

We have full hospital, but no extras, with Teachers Health.

Overall, I thought it was a reasonably good deal considering what others report from their insurance and doctors. 

[Grogounet]

I guess the calculation has to be made for now, but also for the future.
It might come very nasty surprise if you were to decide to take private health insurance later in life, when really needed:

https://www.privatehealth.gov.au/dynamic/lifetimehealthcover.aspx

[Primm]

I guess the calculation has to be made for now, but also for the future.
It might come very nasty surprise if you were to decide to take private health insurance later in life, when really needed:

https://www.privatehealth.gov.au/dynamic/lifetimehealthcover.aspx

Or not.

Imagine a family/couple who decided not to take out PHI at 31. They decide instead to take it out at 50, when the kids have left home, and they are closer to the cliff of needing cataract / joint replacement / whatever other procedures Medicare deems "elective" but which are very life-impacting.

We'll assume that the standard annual rate for PHI is $2000 in the first year, and it increases by 5% each year after that.

We'll also assume that Mr and Mrs Frugal stay in PHI for the 10 years from age 50 to 60, after which time (under current legislation) the lifetime health cover loading is removed.

The first column below shows their age. The second is how much the PHI costs without any leave loading. The third is how much the Frugals actually paid, including their 40% Lifetime Health Cover loading.

Still seem like a good idea? Disclaimer: I have PHI, but not to save money on LCH.

Age   Premium   
31   $2,000.00             $0.00
32   $2,100.00             $0.00
33   $2,205.00             $0.00
34   $2,315.25             $0.00
35   $2,431.01             $0.00
36   $2,552.56             $0.00
37   $2,680.19             $0.00
38   $2,814.20             $0.00
39   $2,954.91             $0.00
40   $3,102.66             $0.00
41   $3,257.79             $0.00
42   $3,420.68             $0.00
43   $3,591.71             $0.00
44   $3,771.30             $0.00
45   $3,959.86             $0.00
46   $4,157.86             $0.00
47   $4,365.75             $0.00
48   $4,584.04             $0.00
49   $4,813.24             $0.00
50   $5,053.90        $7075.46
51   $5,306.60        $7429.23
52   $5,571.93        $7800.70
53   $5,850.52        $8190.73
54   $6,143.05        $8600.27
55   $6,450.20        $9030.28
56   $6,772.71        $9481.79
57   $7,111.35        $9955.88
58   $7,466.91       $10453.68
59   $7,840.26       $10976.36
60   $8,232.27       $11525.18

Total premiums             $132,877.70   
Total actually paid       $100,519.56

[marty998]

I guess the calculation has to be made for now, but also for the future.
It might come very nasty surprise if you were to decide to take private health insurance later in life, when really needed:

https://www.privatehealth.gov.au/dynamic/lifetimehealthcover.aspx

Or not.

Imagine a family/couple who decided not to take out PHI at 31. They decide instead to take it out at 50, when the kids have left home, and they are closer to the cliff of needing cataract / joint replacement / whatever other procedures Medicare deems "elective" but which are very life-impacting.

We'll assume that the standard annual rate for PHI is $2000 in the first year, and it increases by 5% each year after that.

We'll also assume that Mr and Mrs Frugal stay in PHI for the 10 years from age 50 to 60, after which time (under current legislation) the lifetime health cover loading is removed.

The first column below shows their age. The second is how much the PHI costs without any leave loading. The third is how much the Frugals actually paid, including their 40% Lifetime Health Cover loading.

Still seem like a good idea? Disclaimer: I have PHI, but not to save money on LCH.

Age   Premium   
31   $2,000.00             $0.00
32   $2,100.00             $0.00
33   $2,205.00             $0.00
34   $2,315.25             $0.00
35   $2,431.01             $0.00
36   $2,552.56             $0.00
37   $2,680.19             $0.00
38   $2,814.20             $0.00
39   $2,954.91             $0.00
40   $3,102.66             $0.00
41   $3,257.79             $0.00
42   $3,420.68             $0.00
43   $3,591.71             $0.00
44   $3,771.30             $0.00
45   $3,959.86             $0.00
46   $4,157.86             $0.00
47   $4,365.75             $0.00
48   $4,584.04             $0.00
49   $4,813.24             $0.00
50   $5,053.90        $7075.46
51   $5,306.60        $7429.23
52   $5,571.93        $7800.70
53   $5,850.52        $8190.73
54   $6,143.05        $8600.27
55   $6,450.20        $9030.28
56   $6,772.71        $9481.79
57   $7,111.35        $9955.88
58   $7,466.91       $10453.68
59   $7,840.26       $10976.36
60   $8,232.27       $11525.18

Total premiums             $132,877.70   
Total actually paid       $100,519.56

Noted and agree the maths looks good, but the comparison breaks down if the couple is subject to the Medicare Levy Surcharge.

Also note that in a family with kids it is highly likely you would get some benefit from your premiums from age 31 to 50. Glasses, dental, physio, the odd sporting injury etc.

[Eucalyptus]

I guess the calculation has to be made for now, but also for the future.
It might come very nasty surprise if you were to decide to take private health insurance later in life, when really needed:

https://www.privatehealth.gov.au/dynamic/lifetimehealthcover.aspx

Or not.

Imagine a family/couple who decided not to take out PHI at 31. They decide instead to take it out at 50, when the kids have left home, and they are closer to the cliff of needing cataract / joint replacement / whatever other procedures Medicare deems "elective" but which are very life-impacting.

We'll assume that the standard annual rate for PHI is $2000 in the first year, and it increases by 5% each year after that.

We'll also assume that Mr and Mrs Frugal stay in PHI for the 10 years from age 50 to 60, after which time (under current legislation) the lifetime health cover loading is removed.

The first column below shows their age. The second is how much the PHI costs without any leave loading. The third is how much the Frugals actually paid, including their 40% Lifetime Health Cover loading.

Still seem like a good idea? Disclaimer: I have PHI, but not to save money on LCH.

Age   Premium   
31   $2,000.00             $0.00
32   $2,100.00             $0.00
33   $2,205.00             $0.00
34   $2,315.25             $0.00
35   $2,431.01             $0.00
36   $2,552.56             $0.00
37   $2,680.19             $0.00
38   $2,814.20             $0.00
39   $2,954.91             $0.00
40   $3,102.66             $0.00
41   $3,257.79             $0.00
42   $3,420.68             $0.00
43   $3,591.71             $0.00
44   $3,771.30             $0.00
45   $3,959.86             $0.00
46   $4,157.86             $0.00
47   $4,365.75             $0.00
48   $4,584.04             $0.00
49   $4,813.24             $0.00
50   $5,053.90        $7075.46
51   $5,306.60        $7429.23
52   $5,571.93        $7800.70
53   $5,850.52        $8190.73
54   $6,143.05        $8600.27
55   $6,450.20        $9030.28
56   $6,772.71        $9481.79
57   $7,111.35        $9955.88
58   $7,466.91       $10453.68
59   $7,840.26       $10976.36
60   $8,232.27       $11525.18

Total premiums             $132,877.70   
Total actually paid       $100,519.56

Noted and agree the maths looks good, but the comparison breaks down if the couple is subject to the Medicare Levy Surcharge.

Also note that in a family with kids it is highly likely you would get some benefit from your premiums from age 31 to 50. Glasses, dental, physio, the odd sporting injury etc.

Glasses, dental, phsyio are all "extras", not hospital cover. The 2%/year loading only applies to the "Hospital" component (eg the surgery). You can buy extras seperate to hospital if you like. Though often its not worth it unless you have family members with needs such as glasses or need major dental (less likely with good oral hygeine). Orthodontics for example, pretty much every fund out there has a ~$2000 lifetime cap. Its not many years of extras payments before you've saved over $2000.


Agreed the analysis is different if you are subject to the MLS. But in this case, say you are 35 and earning enough (eg $120k) to be subject to the cap. Its not hard in that case to get a cheap hospital cover fund, which works out less than the MLS. This also reduces a year of 2% Lifetime Health Cover Loading. So in many ways the decision is easier and works out nicer for those on higher incomes (which is pretty unfair in my opinion...those on low incomes who really can't afford Private health are stung later on when they really need to buy it).

[marty998]

Oh right... whoops.

I should stop spitting incorrect rubbish here all the time :)

[Ozstache]

After decades of my wife and I not having PHI, we finally encountered the need for a private procedure that the medicare waiting period would have been unacceptable, namely a rapidly growing cataract in one of my wife's eyes that needed immediate removal otherwise there was a high risk of complete loss of sight due to damage from the removal process should it get any larger.

Sure it cost $4400, but averaged over the 30 years we haven't had private health insurance makes it $147 a year, which is still WAAAY ahead of what we would have otherwise paid out in PHI premiums over that time, not to mention that the few people we know who've had this done under PHI were still out of pocket $1000-$1500 which would make the differential even less. I'm still very happy with our decision not to have PHI, even if this sort of event happened 20 times more, which it won't because we only have 4 eyes between us ;-)

[Eucalyptus]

Oh right... whoops.

I should stop spitting incorrect rubbish here all the time :)

Haha, didn't mean to jump on you Marty... you are normally a useful font of knowledge :-)

[marty998]

Oh right... whoops.

I should stop spitting incorrect rubbish here all the time :)

Haha, didn't mean to jump on you Marty... you are normally a useful font of knowledge :-)

All good, no dramas haha. I'm getting a bit slack in my old age.

I expect to get my PHI bill in the mail next week, hopefully the increase is not too much of a sting. Medibank have been largely ok. I even gave them a free plug in Money Magazine last year. Of course, they never thanked me for that...

[Grogounet]

yeah private insurance bill has been "ok"
but, man, the income protection insurance bill...
10% increase last year from memory and this year is like 20% + !

[marty998]

Oh I think I cancelled my income protection in Super (if I haven't I should now). Very very difficult to make a claim and even then I probably won't ever need it.

[Grogounet]

I have one outside super, and used a broker to find the best cover. Could never beat him on the market.

I guess as long as one is prepared to take the risk if we get injured?
Do you have stats on what it takes to make a claim and why it would be not taken into consideration?

[Fresh Bread]

Resurrecting this thread because I finally changed my private health cover *beams*!

It had been getting more and more eye wateringly expensive, and then I got one of those annoying calls from iselect where I didn't hang up and they found me a better deal. I resisted signing up there and then, and later reviewed my options with my current provider, BUPA.

Going on prices after April 1st, we are reducing our monthly payment from $575 to $385. Even after we pay a bit more here and there for extras type providers we are up $2k a year.

You might think I deserve a facepunch for leaving it so long but it hasn't been *that* long since we definitely definitely definitely gave up on fertility, for which we had the toppest top cover.

Here's a really big money saving tip - if you've been with BUPA for more than 7 years, check out the 'my choice' extras plan. On this plan the max benefits increase each year until at 7yrs loyalty you are getting benefits comparable to the top extras plans. The only catch is that you have to pick 4 extras categories. I've picked general dental, major dental, optical & physio. Occasionally I have a remedial massage but only get $22 back anyway so that's easy to drop given the saving. I got to a podiatrist twice a year but I'll pay less than our monthly saving for changing.

EDIT: It's still top hospital cover, just excludes pregnancy, IVF and weight loss surgery.

[limeandpepper]

My private health insurance is offering a suspension for those in financial hardship due to COVID-19. For those who choose this suspension option, they will still be eligible to claim for COVID-19 hospital fees. I've been pondering whether it's worth suspending mine - I can't use most of the extras at this time anyway.