Guest Post: I Was Once a Health Insurance Sceptic
This is a guest post from Kirsty at My Home Truths.
I was once healthy. Apart from being prescribed glasses at age 5, I was pretty much health issue free for the first two decades of my life. I rarely needed to go to the GP and never had to see a specialist until I had my first skin cancer scare at age 15. Life was good.
I must confess that in my early years and well into my 20s I was a health insurance sceptic. I could not see the value in paying for services that I would never use and taking out insurance against my own health. For me, the cost of a pair of glasses a year did not offset the premiums I would pay in between. I was healthy. I was young. I was not in need of ongoing health care. The numbers just didn’t add up for me.
In my mid 20s I got married and then at the age of 28 I had my first child. That’s when my world view on health insurance was first challenged. My baby boy was born with special needs. He required ongoing health management from a team of specialists and I suddenly found myself spending a whole lot more on medical expenses and therapies than I ever had before.
Yet I still held out for as long as possible. Medicare assisted with some of the additional costs and with our incomes affected by having a second child not long after our first, health insurance still seemed like a luxury rather than a necessity. The numbers still didn’t quite add up.
It wasn’t until I was nearing my 31st birthday that I finally took the plunge. At the start of the 2006 financial year, I took out private health insurance, mainly to avoid having to pay a higher premium down the track. Even though there were obvious benefits, I must confess that I still begrudged having to spend money on insuring against later ill health. I didn’t really like betting against my own body!
However, as these things go, it was a good thing I did take out health insurance when I did. My husband was soon diagnosed with Coeliac Disease and my own diagnosis came a few years later. We had a third child and after two difficult births it was reassuring to have access to my own dedicated obstetrician and a private room as I recovered. It was also very useful when it came time to remove my tonsils and for family members to undergo various day surgeries – there are benefits in not having to wait for treatment and to being treated by a specialist that you trust.
Further diagnoses for my children left us reeling but having health insurance available to offset some of the cost of the diagnoses and therapies gave us some peace of mind. It also allowed us to have issues investigated, treated and resolved without having to rely on the vagaries of the public health system. For me, the choice of timing and care that comes with private health insurance is definitely worth the price alone.
It is a very personal choice, and dependent on a number of factors, but I have now reversed my original position. As a healthy, childless 20 something, I honestly couldn’t see the value in banking against my own health. Now, as a mother of three, two of whom have special needs and quickly closing in on middle age myself, I wouldn’t be without health insurance.
It seems I have transformed from a health insurance sceptic to a health insurance convert. It’s funny how things change, isn’t it?
Kirsty Russell is a blogger and writer from Newcastle NSW. Last year, after a health scare, she accepted a redundancy from her public service position of nearly 20 years and is now making a new career for herself working from home. Current projects include drafting a guide to help other special needs parents based on over 10 years of personal experience and developing a podcast to further provide support to parents with kids with special needs. Her two blogs are My Home Truths (where she chronicles her life as well as her experiences as a special needs parent) and Smarter Happier (where, together with her husband, she writes about their experiences trying to make manageable and meaningful change to lead a more family centric and happier life).
Frequently Asked Questions About Health Insurance
There are three types of health insurance in Australia. They are:
- Hospital Cover
- Extras Cover (also known as general or ancillary cover)
- Ambulance Cover
Hospital cover can ensure any unexpected surgeries, treatments or hospital stays you may require will be covered. With appropriate cover you will have the flexibility to choose your own doctor and the option of receiving treatment in a private hospital. Most hospital covers allow you to stay in a private room. One other perk is skipping the public hospital systems’ waiting list, which can be lengthy for non emergency treatment.
Extras cover pays benefits for a a range of services, often including treatments and procedures related to the fullowing:
- Dental/oral health
- Glasses and contact lenses
- Remedial massage
- Hearing aids
- Travel vaccinations
Ambulance cover, as the name suggests, will cover you should you require emergency ambulance transport. In an emergency, there is enough to worry about. Having the expenses covered for provides security and peace of mind. Many hospital covers include emergency ambulance transport If yours doesn’t, you will need to shop for this separately.
Life is unpredictable. You never know when you might need cover. No matter what life stage you’re in, there’s a policy out there for everyone. You can select as much or as little cover as you want, depending on your health needs and requirements. It’s a small price to pay for the peace of mind health cover provides.
There is no one answer here. Costs vary across providers and policy types. Just because a policy is cheap, that does not mean it is ‘value for money’ and vise versa. Make sure you check what’s included and excluded in a policy before signing up, as you want to purchase a policy that best fits your specific needs.
Premium: A premium is the price you pay for your insurance policy (it may be paid annually or on an ongoing basis).
Policy: An insurance plan. In other words, it is the type of insurance you choose to select.
Policy Holder: The owner, or ‘holder’ of a policy.
Claim: In the event that you require treatment for a service covered by your policy, you can lodge a claim for reimbursement of all or part of the cost of that treatment.. These days, most claims are submitted electronically by the health care provider (dentist, physio etc)
Lifetime Health Cover: Lifetime Health Cover was put in place to encourage young Australians to seek out and maintain ownership of private health insurance early in their lives. If you do not take out a policy before you turn 31, extra charges will be applied should you take out a policy at a later time.
This means you will pay a 2% loading on top of your premium for every year that passes after you turn 30. For example, if you take out a policy for the first time at age 32, you will be charged 4% of your premium as an extra, then at age 40, 20% and so on, up to a maximum loading of 70%.
The loading is payable for 10 consecutive years of cover - after which it is removed and you premiums will be reduced.
Pharmaceutical Benefits Scheme (PBS): Medicare offers assistance for Australians with many of their their prescribed medication costs through the PBS. This assistance is in the form of subsidies towards the cost of many medications. You can check if your prescribed medication is on the list of subsidised items here.
Medicare Levy Surcharge: The Medicare Levy Surcharge is an additional charge (tax) applied to single Australian taxpayers who earn over the income threshold of $90,000 per year, or families/couples who earn over $180,000 per year. This surcharge is only applied to those who choose not to have a private health insurance policy.
The surcharge is designed to reduce pressure on the public health system by encouraging those with higher incomes to invest in private health cover.
Private Health Insurance Rebate: The government’s Private Health Insurance rebate lowers premiums for most Australians with private health insurance Older Australians may enjoy an even higher rebate. Our calculator can help you estimate the Government health insurance rebate you may receive.
Disclaimer: The above information is correct and current at the time of publication
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