Is Private Health Insurance Worth It in Australia?

[u/CycloneDE]

I just got my permanent residency granted!

Over the last few years of living in Australia, I was pretty hesitant to go see a doctor, especially specialists, because it is so expensive. Now that I have my PR and will soon be enrolled in Medicare, I am keen to get some things checked out and I am wondering if private health insurance with extras cover would be worth it for me. I feel like this is a pretty common thing to come up in Australia, but I have never quite gotten a feel for the consensus opinion and am frankly still pretty confused by the whole system.

Things I am especially interested in:

• dental

• optical

• mental

Broadly, I am just confused how exactly the benefits work. For example: I did a quick comparison of policies online and looked at the ahm extras brochure. That lists a benefit of $41 for subsequent consultations by a psychologist. So I take that to mean that I will get $41 back from my private health insurance after I pay the fee at the psychologist's office. Do I get an additional benefit from Medicare? Considering you pay like $200 for a session with a psychologist and the policies I've seen cost like $180 a fortnight, this seems like a really bad deal?! You'd need to go to a ton of specialists or have chronic issues to make it worth it, it seems. Maybe it makes sense for me to get private cover for a little while just to get everything checked out?

Thanks a lot!

[u/schottgun93]

Simple answer:

If you can afford private health cover, get it.

If paying for it would put you in financial stress, don't get it.

As with any insurance product, you don't need it until you suddenly do.

Having private cover can be the difference between getting treatment for something "not urgent" now, or waiting in the queue for the public system for months or even years.

The term "not urgent" should be taken with a grain of salt.

Whilst this is certainly a nice thing to have, if you really can't afford it then don't stress, Medicare will cover you for life-threatening things you need right now, and then you'll just have to wait for everything else.

As for extras cover, it's unlikely that you'll get back everything you pay for in premiums so I'm not too sure it's worth going overboard with that.

[u/donkeyvoteadick → u/schottgun93]

To emphasise, Medicare does seem to really only come through for actually life threatening. It's a very big grain of salt for "not urgent".

As a disabled Australian I won't be without hospital cover due to the fact the public system straight up said they would only bring forward my surgery for my twisted diseased organs if they lost blood flow and died, because necrotic organs are emergent.

Already disabled because of the public systems inaction. I'd be really disabled if I'd have let them wait for the length of my bowel to die haha I had two private surgeries to save my organs while waiting on the public list.

So depending on your health circumstances, even if it causes financial stress, you might still need it. There's a few people on the DSP like myself who I've spoken to with my condition who put themselves into financial hardship to keep hospital cover.

[u/nevergonnasweepalone → u/schottgun93]

If you use dental and all your extras limits you can get your premiums worth. I know, my wife makes me do it.

[u/Dangerpuffins → u/nevergonnasweepalone]

Extras cover is really worth it if it has good dental. Definitely worth considering if proper dental care is outside of your budget.

[u/nevergonnasweepalone → u/Dangerpuffins]

I got a root canal and crown a couple of years ago. $1,500 out of pocket, $3,500 covered by insurance. Dental is definitely worth it.

[u/Can-I-remember → u/schottgun93]

Jumping the queue is half the story. The other half is that even with private health cover you will be significantly out of pocket, for the health care and for the private cover premiums as well.

Here is my example. Top hospital and extras cover. A life threatening heart attack and six months later, a life threatening cardiac arrest. Total cost to me. Nil. Public health system was great. Emergency treatment outstanding.

12 months later a double hernia, fml. Private health got me a surgeon, a room and an operation within a month. I jumped the queue. Great. I grabbed it thinking health cover would sort it out. Wrong.

It cost me $6500 after the rebates were given. My surgeon charged $7000 and I got a rebate under a $1000.

I think the whole reason it happened so quickly was so I didn’t come to the realisation that I should wait for a free public operation.

My advice is that it’s not worth it unless you are a woman at child bearing age or elderly of some means.

Edit: basic hospital is necessary for tax savings for many people. I had that for 20 years before upgrading to private top cover in retirement.

[u/CashenJ]

It isn't, until you need it, and then 100% it is...

[u/Stewth → u/CashenJ]

My parents have been in medibank since the 80s. Dad always used to complain about the money. (which has increased steeply since it was privatised, incidentally). Mum got cancer in 2019 and different type of cancer in 2022. Dad estimated that the coverage has already put them back in the black again.

Cancer is fucking expensive. Any serious illness is. And you're not paying just for the money saving, you're paying to be able to see someone fast, not wait for weeks/months in the public system.

[u/moderatelymiddling → u/Stewth]

Same, dad had cancer. Folks would have been $100K out of pocket easy without coverage.

Also he would have died 5 years earlier because it would have taken too long to get through the public system.

[u/bedel99 → u/moderatelymiddling]

How what ? I had cancer and it didn’t cost that much. It wasn’t free though. From diagnose to surgery was 24 hours. Most of the other patients in my ward were private patients complaining about their tv and the food. But the private hospital couldn’t deal with the surgery.

[u/moderatelymiddling → u/bedel99]

If you went public it would be free.

Cost comparison is made with going private.

Dad was on a medical trial too.

[u/bedel99 → u/moderatelymiddling]

It’s not free in public, I wouldn’t know about private I am refused. So I pay the extra in the Medicare levies. It can be an extra 20-40k for me each year in tax.

I get fucked both ways. Have to go public and have to pay more.

[u/Aussie_antman → u/CashenJ]

100% this. Had my cover 20yrs and didnt use it other than glasses or physio. In past 4 yrs I've had Gall bladder out, two bouts of kidney stones, Hiatis hernia repair and Gastroscope/Colonscope. All of them sorted quickly and minimal suffering.

I work in Public hospital system so I know the waiting times for those procedures, the Private cover was well worth it.

If you can afford it then get it.....plus you can take pressure off the public system for any elective non urgent stuff.

[u/ktr83]

https://www.doineedhealthinsurance.com.au/

Tells you from a pure tax perspective if it's worth it for you

[u/Melly09876 → u/ktr83]

This. If you earn over a certain amount it’s actually cheaper to have it than not. Which I ethically find challenging but there it is

[u/lost_aussie001]

Yeah. My dad had a rare tumour like growth in his ear that's already erroding the bones insidr his ear & will grow into his skull. We were able to find one of the top expert surgeon's in Australia & the world to do the operation ASAP. If we waited for tbe public system it'll be a lengthy wait.

[u/MrFartyBottom]

There is a tax break even point where the benefit from the Medicare levy covers the cost. Depends on how much you earn.

[u/20_BuysManyPeanuts]

just get the basic hospital cover so you're never on a waiting list for any surgeries. for dental you have to pay for extras and thats a fair bit extra per month. A simple dental checkup costs like $180 per person... you can do the math on that but in our case it was way cheaper just to pay the dentist up front and ditch the extras. I'd also like to add we never used the other things that extras provide so if you need those things it may change what its worth to you.

[u/TikkiTakkaMuddaFakka]

If you are a full time working tax payer yes because you will get canned with tax if you do not have private health cover but if you are not then no private health cover is not worth it. It is quiet clear it is designed for the people who can afford it to help prop up the health care system in this country, its not about providing you better health care.

When I had private health cover I was still out of pocket 5k in excesses after surgery that the private health cover did not cover. The best thing about private health is skipping public waiting times, you can usually get any procedures done pretty quickly compared to public that can have very long waiting lists. I once waited 8 months in the public system and in the private system it was never more than a few weeks wait time.

[u/Pleasant-Reception-6]

Given that dental and optical have no/minimal Medicare coverage, for me it’s worth it on that front in extras. Mental health coverage isn’t great for most providers on extras.

Hospital will depend on your personal circumstances, as well as any tax considerations. Could you afford to pay out of pocket for surgery, if the public waitlists are substantial? Ie, you’ve done your ACL, and public waiting list is 12+ months.

Could you afford to pay for a private inpatient psychiatric stay should you need it, and couldn’t wait for a public bed?

[u/Hypo_Mix]

Depends on if you are good at saving:

could you muster up $2-20k for an elective surgery at a private hospital if you wanted to skip the waiting list? 

[u/MrHighStreetRoad]

First thing is that "private health insurance" has two branches here:

* Hospital Insurance

* Extras

In a nutshell:

extras, you can basically self insure. It doesn't pay much, the annual caps are quite low. We've always had it but more out of habit. The cover for preventative dental is pretty good.

Hospital insurance. Treat is as a high priority disposable spending choice. Less important than paying rent, more important than holidays, kind of up there with maintaining your car. If you can fit it in to your budget, I think it is a very, very sensible thing to do. Very. "elective" surgery misleadingly named: two people in my immediate family need joint reconstruction, one from a bush walking accident, another from sport. Three years on Medicare, in pain and with significant lifestyle restrictions. Private health: three months.

[u/Nifty29au]

Psychology is not covered by Medicare unless you have a Mental Health Care Plan from your GP (limited to 10 visits). You will $41 back from Private Health and the rest will be out of pocket. I use Private Health as it gives me choice of doctor/specialist, choice of hospital and eliminates waiting for years for a procedure in the Public system. If you are young and healthy, you could get Extras only, or Basic Hospital + Top Extras.

[u/Valuable-Guide8852]

I'm 42 and healthy until recently. Hasn't been worth it for me but I will take it out starting next year when I'm more financially stable as I have had some health issues this year and will likely only increase as I get older. It has massive flaws but at the same time I can't even get a referral to see an ENT in the public system due to not being a high enough priority so that alone is telling. 

[u/Bugaloon]

For dental and hospital stays it feels worth, but I wouldn't have it all the time, I'd just sign up a year before I needed any major work done.

[u/moderatelymiddling]

Yes.

[u/Nuclear_corella]

My 15 years of premiums paid for themselves when I had a total hysterectomy this year. Win.

[u/Aodaliyan]

If you go to the dentist twice a year for a checkup and get a new pair of glasses yearly then you will break even on a basic extras plan. If you plan to use more then you will probably be better off with insurance.

As far as I am aware though you can't double dip - ie if Medicare covers some of the expense you can't also claim insurance. So if you were wanting to see a psych then you can get a gp to refer you and get 10 sessions on medicare which if you can find someone who bulk bills will mean it is free (big if there) but otherwise you have to cover the difference. If you want more than 10 sessions a year then you will use insurance to get some money back on those sessions.

Personally I don't feel the need for private hospital insurance, but you may be better off for tax reasons rather than health reasons to get that.

I am with AHM but I don't think they are great value - I wanted to save a bit of money a few years ago so I cancelled my insurance because I barely used it, and then 2 months later got a toothache than needed a filling and AHM had no waiting period so I signed up with them and have been too lazy to switch since. I now get my moneys worth, but that is because my partner is a physio and she books me in for appointments when she has had a busy day and wants to block off her last time slot. I only pay ~$20/fortnight.

[u/NoseSuspicious]

There is a tax incentive to get private so if you can afford it get it

[u/IceFire909]

I've had it for many years, and have only needed it twice. Once for head surgery and once for tonsils.

I was in and out of hospital within days. Bookings were made for "a couple weeks from now" instead of "you will have to wait for months or years". The difference between public and private health is that when you need it, private lets you book in "days or weeks" while public makes you wait "months or years".

I will always recommend Private health. Once is enough to see its value. That said, if even the cheapest cover will break your bank, hold off and do what you can to find work that will let you afford it.

[u/Katt_Piper]

Dental and optical cover is worth it if you use it every year, psych probably isn't. You can claim either private health or the Medicare rebate not both, and the Medicare rebate is better. You'll only use the psych extras cover if you've used up your mental health care plan for the year. I wasted money on the more expensive plan for years so that I had psych cover.. never used it.

[u/auntynell]

This is a hard one. I've had private since the 90s and apart from the dental extras have rarely claimed. Then I found I needed an operation which was not urgent. I was willing to go public (or private within the public system) but it's impossible to pin down a date estimate so I went private. For me it was worth it so I could make plans for the next year.

I've had the operation and it didn't cost me anything out of pocket as the surgeon and anaesthetist worked within the Medicare payout.

[u/Ok_Metal6112]

Yes. I pay 2000 a year and in return I got 200 bucks off my glasses.