There are many people, particularly those who live in the United States, who may lump Australia in with several other countries that offer “free healthcare,” but that is hardly the whole truth. It’s true that Australia offers many healthcare options covered through Commonwealth and State Government funding, but the country also offers a variety of services provided through private health insurance. One could view these private coverage plans as similar to the plans available on the Health Insurance Marketplace in the US You might wonder why Australian residents would choose private health plans when they have free options, but there are advantages to each. The Australian healthcare system is complex, and different aspects need to be examined.
Medicare is the so-called “universal healthcare” that’s available to residents and some overseas visitors. Medicare benefits include free treatment under certain conditions and lowered costs for many health services. Critical hospital stays for illnesses and injuries are covered under Medicare, as are ambulance rides. For those with complicated care requirements, Medicare may provide rebates for patients who go to registered doctors. Patients can often receive a 100 percent rebate for GP visits and up to 85 percent from specialist visits thanks to Medicare. Some doctors bulk-bill, meaning they accept Medicare benefits as full payment, and they can be incentivized to do so through additional payments through Medicare. A Medicare Benefits Schedule can be obtained online to view all services covered by Medicare for that year.
Hospital and Extras Coverage
As far as Australian healthcare is concerned, private health insurance typically comes into the picture with hospital coverage and extra benefits. Hospital coverage, as the name suggests, is used to cover expenses of hospital stays deemed non-critical. This typically refers to elective surgeries and procedures and may also refer to surgeries following certain sports injuries. Without hospital coverage, wait times for these surgeries can be quite long. Those without coverage also won’t be able to choose their own doctor and may not be allowed a private room for recovery. Hospital coverage is a must for those who want control over their hospital stays.
Extras coverage helps pay for medical expenses outside of hospitals. Extras can be things like dental, vision, specialist visits, chiro, and more. With the right plan, you may be able to cover 100 percent of your costs for things like oral surgery or new glasses. Cheap health insurance also might not be as hard to find as you think. Find cheap health insurance with iSelect, and you may be surprised how many benefits you can get.
While health insurance is often thought of as expensive, there can be some financial incentives for getting private health coverage. This can be especially true for younger age groups. For example, Australia’s Lifetime Health Cover initiative was set up to encourage those under 31 to sign up for private coverage. Purchasing hospital coverage before 31 lets you avoid LHC loading fees, which are additional charges you incur for each year you postpone coverage. A two percent increase in premiums is added to your account up to a maximum of 70 percent after age 30. Getting coverage now can easily save financial headaches later on.
You also might want to get private insurance for tax purposes. If you at least have hospital coverage, you can avoid the Medicare Levy Surcharge. This is an additional tax paid by those who make above a certain income and don’t have any private insurance. The annual threshold for an individual is $90,000, and you’ll be paying at least one percent extra on your income taxes if you don’t have hospital coverage. This is done primarily to ease the burden of the public system.
While Australians can rely on Commonwealth and government-funded programs for their most critical needs, a combination of these and private insurance will generally provide the best service.