Australia has a public health system known as Medicare that provides universal healthcare to all residents. However, many private health insurance plans offer additional services. This article will discuss the different types of health insurance plans available in Australia and help you choose the best one.
What is Medicare?
Medicare is Australia’s universal healthcare system that is publicly funded. It provides some basic services but there are also costs for things like medicines, dentistry, and elective surgery. Some key things to know about Medicare include:
- Medicare covers visits to the doctor as well as some lab tests and x-rays. You pay a small fee each time you visit the doctor.
- Medicare helps cover the costs of public hospital care for things like emergency services, surgery, and maternity care. You usually don’t have to pay when accessing public hospitals.
- Medicare does not cover the full costs of medicines. You have to pay a portion of the costs of most prescription medicines through the Pharmaceutical Benefits Scheme.
- Dental care, vision care, and elective surgery are usually not covered under Medicare. You need additional coverage for these types of services.
- Residents and citizens automatically get Medicare coverage. You don’t need to enroll but you do need a Medicare card.
While Medicare provides basic healthcare coverage, there are still out-of-pocket costs for many services. This is where private health insurance can help. Let’s look more at the different types of private health insurance plans.
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Types of Private Health Insurance Plans
There are several types of private health insurance plans available in Australia to complement Medicare coverage:
Hospital cover helps pay for accommodations and medical treatment received while staying in public or private hospitals. This includes things like doctors’ fees, operating theater fees, accommodation costs like a ward or private room, intensive care, and prostheses.
Extras cover helps pay for services generally not covered under Medicare like dental, optical, physiotherapy, and alternative therapies. These plans usually have annual limits that are reset each fiscal year.
Ambulance cover helps pay for ambulance trips nationally across state borders. Ambulance services are provided by each state and territory. Having national ambulance cover ensures costs are minimized anywhere in Australia.
Overseas Visitor Cover
Overseas visitor cover provides medical treatment for those visiting Australia temporarily who are not eligible for Medicare. This type of cover is available for short-term visitors.
Comparing Private Health Insurance Plans
When comparing private health insurance plans in Australia, there are a few key things to consider:
- Services Covered – What is included under hospital cover like private rooms, prostheses, ambulance transport, etc. What extras are covered like dental, optical, and physiotherapy?
- Excess Amount – The amount you pay upfront before the insurer paying claims. Higher excess plans have lower premiums. Excess doesn’t apply to ambulances or some services.
- Annual Limits – Maximum you can claim each year for certain extras before benefits stop or copayment applies. Higher limit plans cost more.
- Waiting Periods – Time must pass before being covered for pre-existing or specific conditions like pregnancy. Usually 2-12 months.
- Premium Costs – Monthly or annual fee paid to insurers. Plans with lower premiums have tradeoffs like higher excesses or lower annual limits.
- Provider Networks – Make sure your doctors and preferred hospitals and dental providers are in network to maximize coverage.
Using a health insurance comparison site makes it easy to filter plans based on your individual needs and budget. It’s best to get a few options to determine the most suitable plan.
Mandatory for Some & Rebates
While having private health insurance is optional in Australia, there are some incentives to get cover:
- Australians over 30 are required to have Basic Hospital cover or pay a Medicare Levy Surcharge (MLS) on top of income tax if they do not have hospital cover.
- The Australian government provides a tax rebate called the Private Health Insurance Rebate for those with hospital cover. This helps offset premium costs.
- Families earning less than $140,000 per year get the highest rebate tier to make cover more affordable.
- People over 65 get an additional age-based rebate on top of the existing rebate percentage.
Taking advantage of the incentives can help save money on healthcare costs in the long run compared to paying the MLS or all medical costs out of pocket without any cover.
Common Health Insurance FAQs
Here are answers to some frequently asked questions about health insurance in Australia:
Can I switch plans? Yes, you can generally switch between funds or upgrade/downgrade plan levels during annual open enrollment periods. Changes take effect 1-3 months later.
What deductibles and copays apply? Most plans have an annual limit on what the insurer pays for extras before copayments apply. Hospital cover has no or limited deductibles depending on plan level.
When does preexisting condition coverage start? There is usually a waiting period of 2-12 months for preexisting illnesses. Emergency care may be covered earlier.
How long do I need to keep coverage? You can maintain continuous coverage to avoid future waiting periods if you switch later. Plans also discourage downgrades for similar reasons.
What happens if I get a bad rate increase? You can switch insurers within two months of a price rise above medical CPI rate without penalties. Otherwise soft underwriting applies for new plans within a 12 month window.
Are my kids covered? Dependent children are usually covered on parents’ plan until they are no longer considered dependents which is generally until 18 or until aged 26 if a full time student.
How do I submit claims? You can submit electronic claims to insurers through their member portal. Keep doctor invoices and receipts and claim within 2 years for extras and 5 years for hospitals.
Health Insurance Plan Checklist
Use this checklist to help compare plans:
- Services covered – hospital, extras, ambulance
-  Annual limits and caps for different services
-  Excesses amounts for different services
-  Co-payment amounts after limits are reached
-  Provider networks – doctors, hospitals, dentists in network
-  Premium costs – monthly or yearly fees
-  Waiting periods for pre-existing and new conditions
-  Incentives like rebates and surcharge details
-  Extras included like emergency department, prostheses
-  Policy limitations, exclusions or restrictions
-  Claim submission process and timeframes
-  Ability to switch plans – open enrollment periods
-  Customer reviews and ratings of different funds
Taking the time to carefully review plans side-by-side will help you choose the best option that suits your budget and healthcare needs both now and in the future. Let me know if you need help analyzing any specific quotes.
Health Insurance Plan Examples
Here are brief descriptions of a basic bronze plan and a higher-level gold plan as examples:
- Monthly premium: $80 for singles or $200 for families
- Basic hospital cover with shared ward accommodation
- Ambulance included nationally
- Extras cover up to $300 annually for dental, physio, optical
- $500 excess for hospital and $100 excess for extras
- Longer waiting periods for some services
- Monthly premium: $150 for singles or $400 for families
- Private hospital cover including choice of doctor
- Higher annual limits – $1,000 for extras
- Lower excesses – $250 hospital, $50 extras
- Broader extras cover including alternative therapies
- No waiting periods for ambulance and immediate accident coverage
- Additional benefits like emergency department fees covered
While the gold plan has more extensive coverage and benefits, it comes at a higher premium cost. Review cost vs coverage tradeoffs to pick the best value plan for your situation based on expected healthcare needs.
Health Insurance in Retirement
Health insurance remains important in retirement as health costs rise with age. Here’s a quick guide for retirees on plans:
- Maintain minimum hospital cover to avoid MLS for those aged 65+
- Higher age-related rebates make premiums cheaper for retirees 65+
- Review extras cover needs – dental, optical, physio more important later in life
- Consider upgrading plan for additional benefits, better networks as health changes
- Budget for anticipated healthcare costs in retirement, premium increases over time
- Subsidized premium options exist for retirees on certain incomes through Commonwealth programs
- Investigate options for contributing premiums from any superannuation income streams in retirement
With some planning, health insurance can help manage costs as healthcare needs rise later in life. Revisit plans regularly to ensure the best ongoing coverage for the future. If you have any questions let us know in the comments section.