Private hospital cover is health insurance that helps cover the cost of inpatient hospital admissions. The hospital care, services and treatments (known as ‘clinical categories’) covered by your insurance policy depend on your level of cover, but you can claim benefits towards accommodation, theatre fees and the charges raised by your doctor. In fact, all medical services listed under the Medicare Benefits Schedule (MBS) are covered by private hospital insurance.
But the real benefit of private health insurance comes in your freedom to choose how and when you’re treated in hospital, whether it’s in a private hospital or as a private patient in a public hospital.
- Choose your own hospital, doctor and specialist
- Stay in a private room (if available and included on your cover)
- Avoid lengthy public hospital waiting lists
Do I really need private hospital insurance?
While the Australian public health system is there as a safety net, it’s under increasing pressure, with longer waiting times, particularly for elective surgeries. And in addition to potentially having to wait longer for hospital services and treatment, you don’t get any choice with the public system.
On the other hand, with private hospital cover you’re able to choose the hospital and doctor or specialist you want – we currently cover more than 1300 private hospitals across Australia. What’s more, we have a medical gap arrangement in place with the Australian Health Service Alliance (AHSA). It’s called AccessGap and it minimises or even eliminates your out-of-pocket costs.
How much shorter are waiting times with hospital cover?
It depends on the procedure and where you live in Australia, but here’s an example.
In a 2014-15 report by the Australian Institute of Health and Welfare, patients in New South Wales who required a knee replacement waited an average of six months in the public system. Even more disturbingly, 6.6% of the public patients who underwent knee surgery that year waited over 12 months for their elective surgery. That’s a long wait.
With private hospital insurance, you can effectively bypass the public waiting list. You can choose your preferred date for surgery, along with the doctor or specialist you want, without having to worry about getting ‘bumped’, which often happens in the public system.
How does hospital insurance reduce my tax bill?
Have you heard of the Medicare Levy Surcharge (MLS)? It’s a levy that the Federal Government introduced to encourage people to take out private hospital insurance and relieve pressure on the public hospital system.
The MLS is paid by anyone who doesn’t have private hospital insurance cover, so if you have hospital cover, you pay less at tax time.
Does it make sense to take out hospital cover sooner rather than later?
Absolutely. The Lifetime Health Cover Loading is another government incentive designed to encourage people to take out private hospital insurance and reduce the burden on the public system. It rewards you for taking out hospital cover at a younger age.
The Lifetime Health Cover Loading is an additional cost that’s applied to private hospital insurance premiums, so the later you leave it to take our hospital insurance, the more expensive it will be when you eventually do. Find out how the Lifetime Health Cover Loading works.