If you fall ill, have an accident and require surgery or hospital care, private hospital insurance helps cover the cost of inpatient care, services and treatments (known as ‘clinical categories’).
Different hospital insurance policies cover different clinical categories and enable you to claim benefits towards hospital accommodation and theatre fees, as well as your doctor’s charges (take a look at the Medicare Benefits Schedule to see what private hospital insurance covers).
But ultimately, private hospital insurance is about choice. Hospital cover gives you the freedom to choose how and when you’re treated, either in a private hospital or as a private patient in a public hospital. You can:
- 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
Is private hospital insurance really necessary?
It’s not essential, but as the Australian public health system comes under increasing pressure, private health cover can make all the difference. Indeed, with longer and longer waiting times within the public system, it can make a life-changing, even life-saving difference.
What’s more, with private hospital insurance you can choose the hospital and doctor or specialist you want. At HIF, we cover more than 1300 private hospitals across Australia, with AccessGap (our medical gap arrangement with the Australian Health Service Alliance) minimising or potentially eliminating your out-of-pocket costs.
Are waiting times much shorter if I have hospital insurance?
While waiting times vary depending on where you live and which procedure you require, generally you’ll get treated much sooner with hospital cover.
For example, a 2014-15 report by the Australian Institute of Health and Welfare found that patients in New South Wales who required a knee replacement waited an average of six months in the public system. In fact, 6.6% of the public patients who underwent knee surgery that year waited over 12 months, which is a long time to be living with such a debilitating and often painful condition.
If you have private hospital insurance, you’re able to bypass the public waiting list, choose your doctor or specialist and even your preferred date for surgery, without the risk of getting ‘bumped’ – patients often lose their place on the waiting list in the public hospital system.
How does private hospital insurance reduce my tax bill?
It all comes down to the Medicare Levy Surcharge (MLS), which is a levy that the Federal Government introduced to encourage people to take out private hospital insurance, with the aim of relieving pressure on the public hospital system.
The MLS is paid by anyone earning over $90,000 a year who doesn’t have private hospital insurance, and it increases incrementally – the more you earn, the higher your MLS levy.
Find out more about the Medicare Levy Surcharge and use our handy Medicare Levy Surcharge calculator to work out how much you can save by taking out Bronze Hospital or Bronze Plus cover.
Will I have any out-of-pocket medical expenses?
It depends. The Medicare Benefits Schedule (MBS), the schedule of fees set by the Government for standard medical services, determines the amounts that Medicare considers to be a fair for a doctor or specialist to charge.
So, assuming your doctor or specialist charges within the MBS, Medicare will pay 75% of the fee (up to the pre-defined limit) and your hospital insurance covers the remaining 25%. However, if your doctor or specialist charges more than the MBS fee, you’re likely to have an out-of-pocket expense (known as a ‘gap’).
The good news is, our AccessGap scheme can minimise or even eliminate your out-of-pocket expenses. Find out more about how AccessGap works.
Is it better to take out hospital cover sooner rather than later?
Definitely. Like the Medicare Levy Surcharge, Lifetime Health Cover Loading is a government incentive that’s designed to encourage Australians to take out private hospital insurance and relieve the pressure on the public system.
In a nutshell, Lifetime Health Cover Loading rewards you for taking out hospital cover at a younger age – the later you leave it to take our hospital insurance, the more expensive it will be when you eventually do. Learn more about how Lifetime Health Cover Loading works.