Many people pay for health insurance for years without using it, and the premiums can be expensive when you are on a limited income. But as we age, our health needs tend to increase, so is it worth getting, or keeping, private health insurance?
In this episode, we speak with Uta Mihm, health insurance specialist from the consumer organisation, Choice about the pros and cons. She worked on the Choice online tool designed to compare more than thirty health insurance funds.
She says the best aspect of private health insurance is the avoidance of long waiting times for elective surgery like hip replacements.
You can get surgery done in public hospitals, but you may have to wait, even for heart and cancer surgery, especially becaue of the strain on the health system due to Covid
Another advantage is the ability to choose your own doctor, however most people don’t know the best specialists and rely on their GP to advise them. And while private cover pays some expenses, expect out of pocket costs such as gap fees not covered by your insurance.
Private health insurance has two components – hospital and extras. Uta Mihm says extras for services like physiotherapy and optical should be treated like a book of discount vouchers because extras cover doesn’t usually pay the full amount of the service. If you rarely use these services, then extras cover isn’t necessary. She says most people don’t realise they can buy hospital and extras cover from difference insurers, and therefore save money.
In thinking about joining, upgrading or downgrading, first assess your needs – age, lifestyle and pre-existing conditions. Compare funds and check out the smaller funds as they often provide good value. Look at the cost of premiums, whether want reduce premiums by paying an excess fee, and the government rebate.
If peace of mind in avoiding waiting times matters to you, then health insurance might be important. For example you might not be happy to wait for a year or more if you are in pain because you need a hip replacement.