Medicare provides health care for single individuals and for families throughout Australia. However, Medicare is limited and you could face significant financial expenses as well as restrictions on treatment types and care providers.
Purchasing private health insurance allows you to choose a health fund that will pay for better and more comprehensive care. Health insurance for singles is affordable for most Australians and can protect you now and in the future.
What is Health Insurance for Singles?
In Australia, private health funds provide cover for things that Medicare does not. For example:
- Medicare covers only public hospitals and pays only up to the Medicare Benefits Schedule (MBS) fee. Private health insurance funds pay for treatments at private hospitals.
- Medicare does not cover ambulance services but some health insurance policies provide this type of cover.
- Medicare offers no dental cover for adults. Private insurance can pay for dental exams and treatments.
- Occupational therapy, physiotherapy, eye therapy, chiropractic care, speech therapy and psychology services are not covered by Medicare but are covered by many policies.
- Contact lenses, glasses, hearing aids and other hearing appliances are covered by many policies but not by Medicare.
- Medicare subsidises a lot of prescriptions but you still must pay a part of the costs depending upon the drugs your doctor prescribes. Health insurance policies often cover some medication expenses too.
For many single individuals, an illness results in temporary or permanent loss of income without another household member to provide financial support. It is essential to have private insurance coverage so you are not hit with large medical fees at a time when your household income may have disappeared.
Who Can Purchase Health Insurance Cover for Singles?
Anyone can purchase health insurance cover for singles, regardless of whether you are in a committed romantic relationship or not.
- If you are legally married, in a de facto relationship or in a registered relationship, you have a choice of purchasing couples cover OR having one or both partners obtain his or her own separate singles policies.
- If you are not in a legal relationship, singles cover may be your only option for health insurance. You are obviously not eligible for couple’s coverand a family policy with your parents will cover you only until age 21 or age 25 provided you are a full time student.
Because you retain the option to purchase singles cover even if you are part of a couple, you should do your research to determine whether a single’s or couple’s policy makes the most financial sense. Couples insurance can often be purchased for a lower cost than two singles policies.
It is important to note that a couple’s combined income is considered when determining whether a Medicare Levy Surcharge applies. This surcharge is assessed on higher-income individuals if you do not purchase hospital cover. Purchasing either couple’s cover or two separate single’s policies will satisfy requirements and prevent the surcharge.
Do You Need Health Insurance Cover for Singles?
Purchasing health insurance cover for singles can protect you from financial hardship due to illness or injury. With the purchase of private cover you can limit “the gap,” which refers to out-of-pocket payments for medical care. Private cover can provide greater financial security and broader access to better care.
You may need to purchase health insurance cover to avoid the Medicare Levy Surcharge, which is mandatory for higher-income individuals and families who do not hold private Hospital insurance. For 2016-17, a single individual earning $90,000 or above will be obliged to pay the MLS if they don’t have Hospital cover. The higher your income, the more you can expect to pay (up to a maximum of 1.5%).
How to Evaluate Your Cover Needs
The more comprehensive your cover, the more you can expect to pay to purchase for it. However, buying a comprehensive policy makes it possible to pay less when you actually require medical treatment. You must balance whether you wish to pay more upfront for greater certainty if you get sick or whether you prefer lower premiums but higher treatment expenditures.
It is also important to think about your lifestyle now and in the future. For example:
- If you are planning to start a family soon, purchase cover that includes pregnancy. There is a 12-month waiting period for obstetrics coverage, so by the time you fall pregnant it will be too late to purchase a policy to pay for your prenatal care and birth. You are not required to have a couple’s policy to obtain obstetrics care coverage. Single individuals can purchase policies with pregnancy cover but your baby will be covered only if you have a family plan.
Health Insurance Waiting Period Estimator
You will have to serve a waiting period when you start a new private health insurance policy or increase your level of cover. A waiting period protects members of the fund by ensuring that individuals aren't able to make a large claim shortly after joining and then cancelling their membership. This kind of behaviour would result in increased premiums for all members.
Use this calculator to choose a hypothetical date in the future (or leave it on the default setting, which is today's date) to determine when you will be covered for various types of coverage.
Most health insurance funds will apply the following waiting periods to new members taking out a hospital cover product:
Pre-existing conditions will be covered on: February 12, 2019
Obstetrics and Pregnancy will be covered on: February 12, 2019
Psychiatric care, rehab, and palliative care (even if they are a pre-existing condition) will be covered on: April 12, 2018
Other Hospital Benefits will be covered on: April 12, 2018
(These are the maximum waiting periods allowed by law for hospital cover.) These waiting periods also apply to any additional benefits on your new product if you transfer to a higher level of hospital cover, with your existing fund or with a different fund.
Note: If you are moving to the same or a lower level of cover, you will NOT have to re-sit waiting periods.
||Standard Waiting Period
- Alternate/Natural Therapies
- Eye Therapy
- Hospital Treatment
- Occupational Therapy
- Pharmaceutical Perscriptions
- Speech Therapy
- General Dental
- Major Dental
- Pre-Existing Conditions
- Pregnancy Related Services
- As you age, you may need different types of care to treat ailments common to the elderly. Look for health insurance that includes nursing coverage and that pays for things like hearing aids.
When buying singles cover, you have control over the extras you wish to include.
What is the Cost of Private Health Insurance Cover for Singles?
The cost of private health insurance for singles varies depending upon the types of cover purchased and how comprehensive the cover is. Factors that affect the cost include:
- Extras included in the policy cover. Purchasing only private hospital cover is less costly than purchasing a more comprehensive fund that also pays for things like dental work and chiropractic care.
- Whether you choose full gap cover, partial gap cover or no gap cover. The gap refers to out-of-pocket expenses such as costs in excess of policy limits. No gap policies and policies that cap out-of-pocket payments tend to cost more.
- Age at the time of insurance purchase. In Australia, the Lifetime Health Cover system encourages the purchase of private insurance prior to age 30. If you are over the age of 30, you will pay a two per cent age load for each subsequent year. A 40 year old, for example, would pay a 20 per cent age load.
Shopping around for premiums is advised to find affordable private health insurance for singles.
Is Financial Assistance Available to Singles for Health Insurance?
Single individuals may obtain rebates from the Australian government to help pay health insurance premiums. The available rebate varies depending upon income. If you are not in a legal marriage, de facto marriage or registered relationship, your household income is the sole source of funds used to determine eligibility for the rebate. If you are in a recognized relationship, your combined income is used to determine rebate eligibility even if each partner purchases a separate single’s policy.
A single individual is eligible for a rebate provided their income is $140,000 or under. Your age affects how large the rebate will be. For example, a single person with an income between $105,001 and $140,000 who is under 65 would receive a rebate of 8.930 per cent. At age 65, the rebate would increase to 13.395 per cent. At age 70 and up, the rebate would be set at 17.861 per cent.
What if You Do Not Purchase Health Cover For Singles?
There are financial consequences associated with not purchasing health cover:
- You will be charged a Medicare Levy Surcharge if your income is $90,000 or higher and you do not have private hospital cover.
- If you wait until you are over age 30, you pay an age load cost. This is equal to two percent over the base rate for each year over 30. If you get married in the future and wish to purchase couple’s insurance, your age load will be averaged with your spouse’s. This could raise the cost of your couple’s premium, affecting the cost of health insurance for both you and your partner.
- You will be responsible for paying out-of-pocket for all healthcare not covered by Medicare and for all fees above the Medicare Benefits Schedule.
- You may experience greater financial uncertainty due to an inability to limit out-of-pocket costs in case you become sick.
- You will have less access to care providers. Medicare, for example, covers only public and not private hospital care.
The financial costs of not purchasing health cover for singles can total in the thousands if you become ill. Protect your financial future by securing appropriate cover.
Disclaimer: The above information is correct and current at the time of publication.
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