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Can You Afford Health Insurance?

August 31st, 2012 0 comments

Unless you have health insurance, you may not be able to afford expensive medical services in emergency situations.  The last thing you want to do when you are ill is to pay any out-of-pocket expenses.

It is very natural for people to want to try and save money on things they do not use every day such as health insurance, especially since the prices of food, mortgages and petrol are on the rise.

When deciding whether or not you need to get health insurance, you need to first figure out if you would be able to afford an expensive operation in an emergency situation.  For example, if you fall down a flight of stairs and your doctor says your leg needs to be operated on, would you be able to afford it?  Even though your condition is not life threatening enough to be treated immediately through the public system, the discomfort you will be feeling will be a daily distraction for you.  If you go to the hospital for this operation without health insurance, it could easily cost you around $10,000.

Image by Tax Credits.

Image by Tax Credits.

Many people believe private health insurance is expensive.  The truth is you can actually get great coverage for a couple dollars a day.  The cost of the leg surgery could have paid for private health insurance for several years, and the surgery would have been covered.

Most families believe health insurance is a necessary expense because it allows them to choose their own physicians, gain quick access to hospitals, and it reduces the costs for necessary extras.

The health insurance requirements are very different for families at different stages in life, and some examples are listed below.

Couples trying to get pregnant

If you are taking out obstetric coverage for the first time, it is very important that you have the coverage a good bit of time before you become pregnant because the waiting period before giving birth is normally 12 months.

Even though obstetric coverage will raise the cost of your health insurance, here are a couple of ways to offset the cost increase:

1.  Take out coverage that excludes the benefits paid for elderly services.
2.  Reduce or remove your “extras” coverage.  This will reduce your premium.

Families with children

If you are not planning to have any additional children, there is really no reason to have obstetric coverage.  Finding health funds that exclude obstetrics could help you save $1,000 each year.  During this stage of your life, you’ll be getting the most value from your extras, especially dental coverage.

Families with teenagers

During this stage of your life, coverage for your children’s braces is important. Having orthodontic work done can be very expensive.  Fortunately, a good health fund will cover about half of the procedure cost.

The following are 5 reasons why you should consider getting health insurance now if you haven’t done so already:

1.  A major emergency could set you back thousands of dollars unless you have health insurance.

2.  When buying health insurance, you are buying peace of mind. Hopefully you will never have to use your health insurance for any unexpected emergencies, but at least you will have it if you ever need it.

3.  You will want to avoid a long waiting period for treatment.  If you have health insurance, the waiting period for elective surgeries are typically shorter than if you don’t have health insurance.  You will also have your choice of a surgeon.

4.  There may be government penalties if you wait too long to get insurance for you and your family.  For example, unless you purchase health insurance before you are 30 years old, you may end up paying more for it in the long run.

5.  You will be able to get extras coverage.  Extras coverage is the one area where you will actually use the services you pay for – such as dental, glasses and chiropractic.

Remember to always look out for hidden costs when you do your health insurance comparison.  Health insurance can come with an excess, and some health funds may even charge a co-payment.

So, can you afford health insurance?  The way I see it, you can’t afford not to have it.

Policy Cost Calculator

How it works

This policy cost calculator is designed to convert a typical monthly health insurance premium into daily, fortnightly, quarterly, and yearly increments.

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Your Medicare Levy Surcharge is 1% of your income, or $2050

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