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Why You Need Health Insurance

aldwin sab September 2nd, 2011 0 comments

There are many reasons individuals and families choose to purchase private health insurance. These reasons can include saving on taxes, as well as coverage for dental and optical treatments. The importance of health insurance can’t be ignored; it is often cheaper to buy health insurance than “self-insure” over the long run.

Save on Taxes

It’s possible to save money on taxes while purchasing private health insurance cover. For example, most individuals with a taxable income above $90,000 will be charged an extra 1-1.5% in taxes depending on your income tier. This Medicare Levy Surcharge (MLS) is only charged to those that don’t buy private hospital insurance. Many individuals qualify for a basic hospital cover policy that is cheaper than the 1-1.5% MLS. Purchasing hospital cover will cause the government to waive the Medicare Levy Surcharge depending on the period coverage is held and the type and level of cover, potentially saving a great deal of money.

Government Incentives

The Australian Government has also introduced incentives to encourage individuals to purchase private health cover. The Private Health Insurance Rebate, for example, encourages citizens to maintain private health insurance and offers a rebate of at least 30% on the cost of insurance.

The Lifetime Health Cover (LHC) was also created to encourage people to buy health insurance as soon as possible. If you purchase a hospital cover plan after the first July following your 31st birthday you’ll need to pay the LHC on top of the premium. This amount increases for every year over the age of 30, creating a strong incentive to buy health insurance early to save.

General Treatment Coverage

General treatment cover options are also a good choice for many individuals, covering services ranging from dental trips to glasses. Because the out-of-pocket cost for these services can be high, ancillary health cover can potentially save a great deal of money. The services covered will depend on the policy, although therapies like acupuncture are generally included.

Expensive Surgery

Purchasing and maintaining hospital cover can protect from the potentially large cost of a self-funded surgery. Even basic surgeries can cost well over $10,000, making it cheaper to maintain health insurance than run the risk of needing a procedure like knee surgery.

Reduced Waiting Periods

Private health insurance also means shorter waiting periods for hospital admission and elective surgery. Admission as a public patient typically results in much longer waiting lists, as well as a much lower chance of choosing your own doctor. Private patients, on the other hand, have the benefit of choosing their own doctor and hospital. This benefit becomes apparent while waiting for knee surgery, for example. Although this condition is not life-threatening, it’s surely better to be treated as soon as possible.

Peace of Mind

Purchasing private insurance also provides a certain peace of mind. When you purchase the right health insurance cover you can rest knowing that unexpected events will be covered. Your family will also have much more control over the medical treatment you receive, the timing of services and the location. Of course, coverage depends on the level and type of cover you buy, as well as any restrictions that apply to your policy.

Avoid Government Penalties

Purchasing health cover also protects you and your family from government penalties like the Lifetime Health Cover (LHC). This penalty causes you to pay more for any health insurance you purchase over your entire lifetime if you don’t purchase before the age of 30. The maximum surcharge is 70%, with individuals that join after their 31st birthday paying a 2% surcharge and those that join at 45 paying 30% on top of the regular premium. The Private Health Insurance Act of 2007, however, includes a provision that eliminates the loading of a basic premium after a full ten years of hospital cover.

Private Hospitals

Many consider the private hospitals to be a major reason to purchase private health insurance. Private hospitals introduce a comfort level not seen in public hospitals, providing extra health services as well as the ability to choose your hospital. Depending on the hospital, you may enjoy extra amenities like a private, single-bed room, a private bathroom and a television. Although additional charges may come with these perks, many consider it a great benefit to buying private hospital cover.

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