"Why do I need private health insurance?"

HIF News

HIF Australia

This week we received the following comment on our Facebook page from a chap called Jamie. We thought it was a really interesting question that other people may also be confused about, so here's our response in case it's helpful to our readers.

Question: Why pay for private health insurance when you have to also pay a gap? Why do we need it when Medicare and the public system is something I've already paid for through my tax? - Jamie.


Hello Jamie, thanks for your message. I completely understand your point of view regarding the “public vs private” debate, and perhaps I can help to clarify…

There’s a number of reasons why private health insurance may be a better option than relying solely on the public system. Firstly, holding private hospital cover allows you to choose your own hospital, doctor and/or specialist. HIF covers more than 500 hospitals across the country and we also have a medical gap arrangement in place with the Australian Health Service Alliance (AHSA) called AccessGap, which minimises gaps and other out-of-pocket costs for our members wherever possible.

Also, while you’ll of course receive immediate treatment or surgery for urgent/life threatening conditions through the public system, another benefit of having private hospital cover is that you’ll have a much shorter waiting time for any elective surgeries you may need in the future. For example, in 2013 the Australian Institute of Health and Welfare reported that patients needing common surgeries like ophthalmology, ENT and orthopaedic can face waits of up to 11 weeks in the public system, and of the total number of public patients seen last year, 3% had waited over 12 months for elective surgery. Here’s the link to that report in case you’d like to read it: http://www.abc.net.au/news/2013-10-04/public-hospital-patients-waiting-more-than-12-months-for-electi/4997866 

In comparison, private hospital insurance reduces wait times significantly and you can even choose your own specialist for additional peace of mind. From my own personal experience a couple of years ago, I needed elective surgery and was told to expect a wait of at least three months – that is, until I confirmed I had private hospital cover, and then I had the surgery done the following Monday. Had I waited the three months required by the public system, I would have spent those three months in a great deal of pain even though my condition was not classified as urgent. Private hospital cover also enables you to choose your own surgery date, while in the public system there’s a risk you could be bumped if another patient needs treatment more urgently than you.

Since 2000, the Federal Government has also introduced a number of incentives for holding private hospital cover, such as the health insurance rebate and the Medicare Levy Surcharge (MLS) tax break (and in contrast, potential  tax penalties such as Lifetime Health Cover age loading if you don’t hold hospital cover by the time you turn 31). Having said that, the rebate and MLS thresholds became means-tested in 2012 which subsequently added extra pressure to the public system due to some people dropping their private cover as a result, therefore leading to even longer waiting times in the public system. More information on the MLS is available here if you’d like to find out more: http://www.hif.com.au/health-insurance/hospital-cover/make-a-tax-saving/

In addition to private hospital cover, we also offer a range of “Extras” cover options (sometimes referred to as “ancillary” or “general treatment”). These products cover those more common, everyday services such as dental, chiro, physio, osteo, optical and more, plus appliances like hearing aids, blood glucose monitors and nebulisers, should you ever need them in the future. With HIF Extras cover, you’re even covered for ambulance transport, plus ‘healthy lifestyle’ type services such as gym memberships, exercise physiology, quit smoking programs and cancer screenings. More info on that is available here in case it’s useful: Extras Cover Comparison Table

I hope that helps to answer your queries anyway Jamie, but please don’t hesitate to let me know if you have more questions or would like more information. 

Thanks and kind regards,

Nikki Dale
HIF Digital Manager

View more handy FAQs about private health insurance

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