Private health insurance is issued by companies licensed under the 2007 Private Health Insurance Act. The Private Health Insurance Administration Council (PHIAC), an independent Australian government body, regulates the financial performance of licensed health insurers to ensure that solvency and capital adequacy requirements are met.
Below are some facts associated with health insurance in Australia.
1. More Comprehensive Coverage
As compared to public health insurance, private health insurance allows for more to be covered when it comes to your health. This includes medical services such as physiotherapy and dental. You also get treatment at a hospital of your choice.
2. Pay Less Tax
In Australia, by getting private health insurance, you pay less tax.
The Medicare (Australian Government Human Services Medical Department) levy surcharge is a fee on people who:
- do not have private hospital coverage
- earn income above a certain amount
The surcharge is above the Medicare levy and is equal to 1.5% of your taxable income.
3. Get a Private Health Insurance Rebate
Many private health insurance people receive a rebate from the Australian government. You earn the refund as:
- Lower insurance rates through your health insurer, and
- A rebate in your annual tax return – reducing the tax you have to pay
You are entitled to a refund if:
- You have private health insurance that includes hospital care, extra cover or both
- Your income is less than a certain amount
The size of the refund depends depending on your income:
- Single income rates apply to individuals.
- Family income rates apply to families (including de facto) or single parents. If you have children, the rates will rise after the first for each child. The individual has full freedom to set the terms of the policy in insurance for singles. Solely a single individual will opt for the policy to be discontinued. The policy can be decided on the premise of his/her own personal, medical, monetary & social things, instead of cover variety of people like in group insurance.
4. Hospital Cover Facts
Hospital cover helps reduce treatment costs as a private patient in any hospital, including:
- Private hospital
- Public hospital
- Day hospital facility
Specialist and Doctor Services Covered
Private health insurance includes some or all medical services covered by Medicare, depending on the hospital plan you take out.
Hospital Services Covered
Based on the hospital cover you take out, it also covers:
- Theatre costs
- Hospital accommodation costs (including meals)
Gaps are the difference between:
- What hospital, specialist, and doctor fees are charged for a service
- How much Medicare and your health insurer pay for that service
If your health insurer and your hospital/doctor do not have a gap cover agreement, you have to pay for gaps (often) from your own pocket.
5. Waiting Periods
You may have to wait a while before you can claim benefits when you take out private health insurance and expand your coverage. Periods of waiting for different services can vary. The waiting periods that apply to you are specified in your plan.
If you’re ill once you take out health insurance, you may need to wait for that illness to be treated. The waiting period is usually 12 months for pre-existing conditions.
The waiting period ensures that people are unable to make a claim and then immediately drop their cover. This sort of claiming would mean higher premiums for all.
Your premiums will be higher if you want:
- cover for additional health services
- comprehensive or top cover
- co-payments or zero excess
Government loadings and rebates might also have an effect on your premiums.
Private health insurance basically covers a lot in Australia but it is dependent on a range of factors. As long as you are mindful of those, you will be able to calculate how much insurance coverage you have.