How much does private health insurance cost?

  • November 02, 2020 05:21 PM AEDT
  • Edita Ivancevic
    Journalist Edita Ivancevic
    212 Posts

    Edita is a young journalist who graduated in 2019 from the Faculty of Political Science in Zagreb, Croatia, specialising in Television and Public Relations. Since the teenage years, Edita gained knowledge of news reporting and analysing complex curre...

How much does private health insurance cost?

Do I need private health insurance? How much is it going to cost? Is it worth it?

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These are some of the many questions that go through people’s minds before buying a private insurance policy. As private insurers usually charge a lot of money for their services, it is advised to compare as many companies as possible, while checking the following options:

See if private health insurance is profitable for you

Private insurance is not mandatory to have in Australia. Having a private policy is entirely up to the residents depending on their needs and out-of-pocket costs they would need to pay aside from Medicare.

The Australian government had imposed Lifetime Health Cover (LHC) as an initiative to get young people into private healthcare. All residents aged 30 years and below should get additional policies if they do not want to pay an extra 2 per cent of tax. However, the incentive happens when Aussies eventually get into private healthcare and are charged higher premiums for ten years.

RELATED: What factors can impact your health insurance premiums?

Moreover, people with higher incomes (more than A$90,000 for singles and A$180,000 for couples) need to pay for Medicare Levy Surcharge (MLS) as an additional tax. Most of Australians do not fall into that category, so there is likely no need to be worried. However, wealthier Australians are the only social group that would save money if they took out private insurance rather than pay for MLS.

ALSO READ: What are the different types of health insurance available in Australia?

Image Source: © Kalkine Group 2020

Image Source: © Kalkine Group 2020

            Figure out what benefits you genuinely need

Different people need different insurance coverages so everyone should weigh in what they truly need. As there are hospital cover policies and ‘extra’ coverage (includes specialists), one should ask themselves questions like if they regularly see specialists, play sports, or have a challenging physical career.

Individuals that do those things are likely to be profitable from taking out private insurance, as specialists and frequent admissions for private hospitals are not cheap. Moreover, older people are likely to need more medical attention so their private policy should have more benefits to it and not be the same one as they got when they were 30.

INTERESTING READ: Australian Health Insurance Got Expensive in October; How can you save?

            Choose wisely

Australia has more than 30 private insurance companies that offer thousands of healthcare policies. One should never settle for the first choice, as every policy depends on location, income, age, and others.

Before the decision, everyone should make sure they checked all options. Australian government developed a straightforward comparison of registered Aussie insurers with many options to choose from, called Private Health. The website might make that tough decision a bit easier.

            Pay constant attention to your policy

Private companies tend to change their terms and conditions over time – usually in April. That is also the time when insurance premiums tend to rise, so one should check similar things from time to time.

With those constant changes, some providers might make a better deal that would suit someone’s needs. One should consider switching to a different provider if the deal looks better, mainly because the change is free-of-charge.

DID YOU READ: How does age impact the cost of health insurance plans?

            Terms and conditions

All private companies have many terms and conditions so they could protect themselves from overspending. Those conditions often include exclusions from the policy, meaning what the insurers do not pay for. After taking everything into consideration (and waiting periods!), one should determine if they are ready to commit to the private insurance company.

What are the different categories of private health insurance policies?

Total insurance costs will be calculated once the individual chooses the best possible policy: Basic, Bronze, Silver, or Gold.

The Basic policies are usually there for avoiding additional MLS costs and LHC loading. They do have some benefits they cover for (usually accidents and ERs), but they are modest. High out-of-pocket costs and small monthly fees.

  • The Bronze policy falls into the affordable category but offers more than a basic package. It pays for 21 clinical categories.
  • The Silver policy covers 29 medical departments. Unlike basic and bronze, it includes dental treatments and cardiac surgeries.
  • The Gold policy is the most expensive package one could get, but also offers the most ‘extras’. It covers for 38 categories and includes gynaecology and obstetrician treatments.

What are private health insurance policy costs in Australia?

On average, Australian resident pays around A$100 monthly for private health insurance.

The table below shows the premiums (monthly) for hospital cover for an individual living in Queensland. Please note that a A$750 Excess is also included.

DO READ: 6 Important checklist items to consider while buying health insurance plans



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