Even while you're young and healthy, health cover is still a really important thing to consider. We
explain
why, so you can make up your own mind about whether it's right for your needs.
1. Private health insurance has its advantages
The real benefit of hospital insurance is you can go to a private hospital and choose your time of
treatment (instead of going on a public hospital waiting list and potentially waiting months or
years
for surgery—which is no fun if you’re injured or sick).
Hospital insurance also lets you choose your own doctor and gain access to a private room (if it’s covered
on
your hospital insurance product and available).
Then there’s extras insurance. It helps cover the cost of health services outside of the
hospital—things
like dental, glasses and physio.
Medicare generally doesn’t cover those things so extras insurance is
always
handy.
2. Hospital insurance helps you avoid the Medicare Levy Surcharge
The Medicare Levy Surcharge (MLS) applies if you don’t have hospital insurance and
your
income for MLS purposes is more than $93,000 as an individual or $186,000 as a family1.
The surcharge exists to encourage people who can afford it to take out hospital insurance, use private hospitals,
and
reduce some of the pressure on the public system.
Avoiding the MLS is easy. Simply take out an appropriate level of hospital insurance2. Just a heads
up—if you only buy extras
insurance, the MLS will still apply.
If you do get hospital insurance to avoid the MLS, make sure you get a product that covers what you need. Some
products only cover the bare minimum, so you might find that, while it helps you avoid the MLS, if you try to
use it
you might not be covered.
3. Getting hospital insurance earlier in life will save you money later
You’re probably vaguely aware of a turning 30 and health insurance thing.
It’s called Lifetime Health Cover loading, and it’s an extra cost added to the base price of hospital
insurance. Like the MLS, it’s designed to get you to buy hospital insurance.
If you’re 31 or older and you don’t have hospital insurance, you’ll get hit by
the
loading if you buy hospital insurance later in life.
When you do take it out, for every year you are over 30, you’ll pay an extra 2 percent for your
hospital insurance. The most you can pay in loading is 70 percent.
For example, if you’re 40 and taking out hospital insurance for the first time, you’ll pay 20 percent
more than a 30-year-old you.
Most people think you need to get hospital insurance before you turn 30 to avoid the loading, but you have more
time
than you think. The turning-30-thing is actually a turning-31-thing.
To avoid the loading, you need to buy
hospital
insurance on or before 1 July following your 31st birthday. This is the case for most
people, but there are
exceptions.
And that’s all you need to know! If you’re interested in learning more about choosing a health
insurance
policy that suits your needs and budget, check out our helpful article: How to choose the best health insurance for
young singles.