Private Medical in Australia

Private Medical Insurance

Private Medical Insurance does not generally cover standard Doctors fees, as they are mainly covered by Medicare.

Medical Insurance comes in two main parts:

There is the main Hospital cover, which provides cover to pay for all, or part of, hospital related costs in the event of hospital treatment being needed in a private hospital.
Extras cover, which is an add on option to Hospital cover, or can be taken on its own, provides insurance cover to help towards costs of certain costs incurred outside Hospital. These include Dental, Optical, Pysiotherapy and Podiatry.

Hospital Insurance cover has become much more popular during the last 10 years, possibly due to the Medicare Levy Surcharge for some people without it, and as at March 2009: 44.6% of the population had Hospital Cover. In June 1998 it was only 30.6%

Some actual legislation changes and the resulting change in the numbers with hospital cover:

Jun 1998 30.6% had Hospital cover
Jan 1999 Rebate introduced for Hospital cover
Jul 2000 Lifetime Health Cover legislation introduced
Jun 2001 44.9% had Hospital cover
Jun 2006 42.7% had Hospital cover
Apr 2007 Health Cover legislation extended
Jun 2007 43.5% had Hospital cover
Mar 2009 44.6% had Hospital cover

A Few Links relating to Private Medical Insurance

Privatehealth.com.au – Health insurance explained in easy terms.
medicareaustralia.gov.au – What you are, and are not, covered for under Medicare.
www.privatehealth.gov.au – Private Health Insurance Comparisons.
helpmechoose.com.au – a comparison of different policies from 5 health funds

Lifetime Health cover loading

New migrants receive a grace period to purchase hospital insurance without incurring a Lifetime Health cover loading.

“A loading of 2 per cent on top of a member’s premium will apply for each year a member’s lifetime health cover age is above 30 when they first take out hospital cover.”

Migrants who become eligible for Medicare on or after 23 April 2004 do not pay a Lifetime Health Cover loading if they purchase hospital cover by the later of:

the 1 July following their 31st birthday, or
the first anniversary of the date they were accepted for Medicare.

If you were born on or before 1 July 1934, you are not affected by Lifetime Health Cover. This means that you can purchase hospital insurance at any time and you will always pay the base rate premium.

One recent example from: PDF Document at www.health.gov.au:

Hanh is aged 35 and she migrates to Australia on 1 March 2008.
She has a permanent residency visa so she is eligible for Medicare.
She applies for a Medicare card on 1 April 2008.
If she takes out hospital cover before 1 April 2009, she pays no LHC loading.
If Hanh delays purchasing hospital cover until after 1 April 2009 (one year after she applied for her Medicare card) a LHC loading based on her age is applied (2% for every year she is over the age of 30 at the time she takes out hospital cover).
The important date is the date that Medicare Australia accepts her application for a Medicare card.
Loading Examples based on age when taking out the policy:

Age 32 = 2% loading (approx)
Age 35 = 10% loading (approx)
Age 40 = 20% loading (approx)
Age 55 = 50% loading (approx)

Some Links for more information on this

Frequently Asked Questions

The following “Frequently Asked Questions” are answered at this website: Department of Health

How does Lifetime Health Cover affect me if I am unable to maintain my hospital cover for certain periods of time?
How can I find out how many of my permitted days without hospital cover I have used?
Can I change the level of my hospital cover without affecting my Lifetime Health Cover loading (LHC loading)?
How is my LHC loading affected if I want to change from a single policy to a family or couples policy?
Are there any other provisions for special circumstances relating to Lifetime Health Cover?
Can I apply for an exemption from my LHC loading?

Do you really NEED Medical Insurance ?

If you are a family of 5 or 6, then it is worth it, as they pay the same premiums as a couple, but get much more back in benefits.

Medical Category Advert

Many singles, and younger couples will drop out, leaving the burden of those that are claiming more to be paid by themselves in the premium increases that are expected to happen soon.

That in turn will make more people drop out, causing even further premium rises.

I can only see it stabilising if they calculate premiums according to family numbers, and spread the cost evenly, thereby bring the cost down for those who rarely claim.

However, on the side of Insurance, if two neighbours had heart problems, one with insurance and one without, one would be fixed up immediately with insurance paying the $50,000 approx cost.
The other may die before he gets seen.

I don’t have insurance myself, but I spent the premiums on buying a spare house. I’ll sell it if I need to.

How much does Private Medical Insurance Cost

The price for private medical insurance varies depending on age and the cover required.
However, an idea of an average premium can be obtained from recent news reposrt about the price rises due in April 2009.

Private health insurers have been given the go ahead for a 6% increase in medical insurance premiums from April 2009, and this increase would, on average, raise the cost of a combined family policy by about $3 a week.

The above figures indicate that the average policy will cost about $53 pw after April 2009.

Tax Offset for medical expenses over a specified limit

There is a medical expenses tax offset that may be available if you have out of pocket medical expenses over a specified limit in an income year.
The 2004-2005 year threshold is $1,500, and any medical costs exceeding this can be claimed against, and a Tax Offset of 20% of the excess is claimable.

This is claimed on your end of year tax return through the ATO.

More details at: Our page on… Medical Expenses Tax Offset

Private health insurance – frequently asked questions

All of these questions are answered at: www.health.gov.au

Am I covered as soon as I take out private health insurance?
Am I covered for a condition that I had before I took out private health insurance?
Can a health fund refuse to insure me because I am elderly or chronically ill?
Can I change health funds if I want to?
Can I change the level of cover I have?
Can I still access Medicare if I have private health insurance?
Do I have to have private health insurance?
Does my income affect whether or not I have to have private health insurance?
If I go overseas, how can I avoid waiting periods and pre-existing ailment restrictions when I get back?
If I have private health insurance, do I have to use my private health insurance, or can I still go into hospital as a Medicare patient?
My private health insurance has a benefit limitation period. What does this mean?
My private health insurance has a co-payment on it. What is a co-payment?
My private health insurance has an exclusion on it. What is an exclusion?
My private health insurance has restricted benefits. What does restricted benefits mean?
What are the benefits of Private Health Insurance?
What are the contact details of the registered health funds?
What can I do if I think my health fund has treated me unfairly?
What if I fall behind in my contributions?
What is a front end deductible, also known as an excess?
What is a loyalty bonus and how can I get one?
What is the pre-existing ailment rule?
What is a suspension?
What does private health insurance cover me for?
What doesn’t private health insurance cover?
What if I can’t afford private health insurance?
What is a waiting period?
What is Private Health Insurance?
Why is the Government encouraging people to take out private health insurance?
Why do I have to pay the Medicare Levy when I have private health insurance?
Why do the health funds impose waiting periods on new members?