BlogBudgetingInsuranceShould I cancel my private hospital cover?

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Every year, around this time, there is one topic of conversation that seems to flood the airwaves: health insurance. Health funds start increasing their fees so all the associated marketing campaigns come out, the comparison sites start reminding us of the need to compare and switch, and numerous news articles pop up highlighting some of the ‘junk’ health policies available out there. So I wanted to get in on the action with a question from the community and give you a somewhat personal take on the answer.
“Hi Tash, I am looking at reducing some of my family’s outgoing expenses. Im thinking of reducing our private health to extras only since I have Medicare which covers emergency ambulance and hospital. Why do I need both?

 

Let me start with a story. Two years ago, my husband’s work colleague was single, in his early 40s, and apart from an ongoing heart condition he was in pretty good health. He went in for scheduled heart surgery as a public patient, and everything went well so he was released from hospital. A few days later though, he had to be re-admitted due to complications and needed a second surgery. Now, you would think that it doesn’t get more urgent than heart surgery, right? He was awaiting urgent heart surgery in a public hospital, but unfortunately due to the triage system and the demand placed on the hospital with emergency cases coming in, his surgery kept getting postponed to the next day, and then the next day. This went on for a week and sadly, he passed away in hospital waiting to have his urgent surgery.

While it is true that our public hospital system is excellent in many ways, it is also known that there can be long waiting lists depending on the circumstances, and sadly this is one case where the system couldn’t handle the load.  Could the same thing have happened with a private doctor? Possibly. But I would argue the chances of that would be lower. When you add to that the risk of future governments following in the footsteps of the USA and privatising a lot of our medical care… I think there are good reasons to hold on to private hospital cover if you can afford it.

Here are some other things you should consider before you make a decision.[/cs_text][/cs_column][/cs_row][/cs_section][cs_section bg_color=”#252525″ parallax=”false” style=”margin: 0px;padding: 0 0px;”][cs_row inner_container=”true” marginless_columns=”false” style=”margin: 0px auto;padding: 0px;”][cs_column fade=”false” fade_animation=”in” fade_animation_offset=”45px” fade_duration=”750″ type=”1/1″ style=”padding: 0px;”][x_custom_headline level=”h2″ looks_like=”h3″ accent=”false”]If you don’t have private hospital cover you can be penalised financially.[/x_custom_headline][cs_text]The Medicare Levy Surcharge is applied to your income as a tax if you earn over $90k as a single, or $180k as a family, unless you have private hospital cover. The levy goes upwards from 1% depending on your income, and is only waived if you have private hospital cover (the waiver does not apply to extras).[/cs_text][/cs_column][/cs_row][/cs_section][cs_section parallax=”false” style=”margin: 0px;padding: 0 0px;”][cs_row inner_container=”true” marginless_columns=”false” style=”margin: 0px auto;padding: 0px;”][cs_column fade=”false” fade_animation=”in” fade_animation_offset=”45px” fade_duration=”750″ type=”1/1″ style=”padding: 0px;”][x_custom_headline level=”h2″ looks_like=”h3″ accent=”false”]Medicare does not cover emergency ambulance cost[/x_custom_headline][cs_text class=”cs-ta-left”]You mentioned Medicare covering ambulance – it is a common misconception, however in Australia Medicare does not cover emergency ambulance unless you are eligible for a concession. For most people this means that unless they obtain cover through a private health fund or a subscription to a state ambulance service, each trip could easily cost you upwards of $1,000 (depending on where you live and treatment received).[/cs_text][/cs_column][/cs_row][/cs_section][cs_section bg_color=”#252525″ parallax=”false” style=”margin: 0px;padding: 0 0px;”][cs_row inner_container=”true” marginless_columns=”false” style=”margin: 0px auto;padding: 0px;”][cs_column fade=”false” fade_animation=”in” fade_animation_offset=”45px” fade_duration=”750″ type=”1/1″ style=”padding: 0px;”][x_custom_headline level=”h2″ looks_like=”h3″ accent=”false” style=”color: rgb(255, 140, 0);”]You might be able to get a better deal on your hospital cover than what you’re paying now.[/x_custom_headline][cs_text]Use www.privatehealth.gov.au to compare policies and providers annually as providers will change their offers each year. It is also worthwhile checking what you are covered for and make sure you’re only paying for what you need.[/cs_text][/cs_column][/cs_row][/cs_section][cs_section parallax=”false” style=”margin: 0px;padding: 0 0px;”][cs_row inner_container=”true” marginless_columns=”false” style=”margin: 0px auto;padding: 0px;”][cs_column fade=”false” fade_animation=”in” fade_animation_offset=”45px” fade_duration=”750″ type=”1/1″ style=”padding: 0px;”][x_custom_headline level=”h2″ looks_like=”h3″ accent=”false” style=”color: rgb(255, 140, 0);”]Assess whether you are getting value for money from your extras. [/x_custom_headline][cs_text] When it comes to extras, most people pay more in premiums than they receive back in claims so it’s possible that you could be better off setting the money aside and saving it up instead. Request the last couple of years of claim statements from your provider and compare the fees you paid to the claims you made before deciding whether to keep it.[/cs_text][x_custom_headline level=”h2″ looks_like=”h3″ accent=”false”]If you’re determined to cancel your private hospital cover, consider having some other insurances.[/x_custom_headline][cs_text]Some quality trauma cover (also known as critical illness) can help you cover out of pocket medical costs if you’re diagnosed with certain illnesses or injuries. It still may not give you access to private specialists (some only work with people with private hospital insurance) but it is better than no cover at all. You can read more about the difference between life insurance and health insurance here.[/cs_text][/cs_column][/cs_row][/cs_section][cs_section bg_color=”rgb(37, 37, 37)” parallax=”false” style=”margin: 0px;padding: 0 0px 25px;”][cs_row inner_container=”true” marginless_columns=”false” style=”margin: 0px auto;padding: 0px;”][cs_column fade=”false” fade_animation=”in” fade_animation_offset=”45px” fade_duration=”750″ type=”1/1″ style=”padding: 0px;”][x_custom_headline level=”h2″ looks_like=”h3″ accent=”false”]Submit a Question![/x_custom_headline][cs_text]Have a finance question you’d like answered? Why not drop me a line! Each week I would love to answer a question from the community. Click below to get in touch.[/cs_text][x_button size=”global” block=”false” circle=”false” icon_only=”false” href=”mailto:tash@womenwithcents.com.au” title=”” target=”” info=”none” info_place=”top” info_trigger=”hover” info_content=””]ASK TASH[/x_button][/cs_column][/cs_row][/cs_section][cs_section parallax=”false” style=”margin: 0px;padding: 25px 0px 0;”][cs_row inner_container=”true” marginless_columns=”false” style=”margin: 0px auto;padding: 0px;”][cs_column fade=”false” fade_animation=”in” fade_animation_offset=”45px” fade_duration=”750″ type=”1/1″ style=”padding: 0px;”][x_image type=”none” src=”http://www.womenwithcents.com.au/wp-content/uploads/2016/07/Email-photo.jpg” alt=”” link=”false” href=”#” title=”” target=”” info=”none” info_place=”top” info_trigger=”hover” info_content=””][/cs_column][/cs_row][/cs_section][cs_section parallax=”false” style=”margin: 0px;padding: 45px 0px;”][cs_row inner_container=”true” marginless_columns=”false” style=”margin: 0px auto;padding: 0px;”][cs_column fade=”false” fade_animation=”in” fade_animation_offset=”45px” fade_duration=”750″ type=”1/1″ style=”padding: 0px;”][cs_text style=”font-size:12px;”]The information provided by Women with Cents is general in nature. It doesn’t take into account your objectives, personal financial situation or needs. Think of it as educational material in which to help you make more-informed decisions. We recommend you obtain financial, tax and credit advice specific to your situation before making any investments or financial decisions.

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2 comments

  • Felicity

    April 6, 2017 at 10:02

    My husband wanted to cancel our health insurance. We are in our 40’s with a pre-teen at the time. No serious health conditions. That was until they found out I had Stage 4 (Terminal/incurable) Bowel cancer. Under the Public System, you would think that would be pretty urgent to remove my bowel and start chemo. Nope. We had health insurance. I have received top treatment and seen the best Doctors available. I have been given treatment that the Public system would not try as they deem it “Not necessary”. Other than paying my once off excess. I have received the best care that sadly my friends going public have not and will not receive. I am now 12 months in remission. I am about to undertake a new combination of Radiation with chemo for 6 weeks, every day. Not all of it is covered under Private insurance. Public wouldn’t even put me on their books. Something I need to keep me alive. The Public system deem not necessary. It is not worth the risk. One ambulance trip was $3,500. My hospital stays and treatment is around $100,000 and all I have had to pay is my excess and monthly payments. My health insurance HCF also had an emergency fund that allows you to receive $1000 for you to use anyway you like. I wish I could convince more people that, while our public system is good, for general conditions. It is not the very best you can get if you are really really sick. We insure our cars and hope we don’t have an accident. I don’t know why people won’t insure their health.

  • Sandra Hylton

    April 28, 2017 at 10:28

    Wow Felicity thank you for sharing , that really cemented my decision to keep our insurance. We think it’s not necessary until it’s really needed.

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The information provided by Women with Cents is general in nature. It doesn’t take into account your objectives, personal financial situation or needs. Think of it as educational material that helps you make more-informed decisions. We recommend you obtain financial, tax and credit advice specific to your situation before making any investment or financial decisions.

Sova Financial Pty Ltd Trading as Women with Cents (ABN 71 163 435 836) | Sova Financial is an authorised Credit Representative (443432) of Finsure Finance & Insurance Pty Ltd (ACL 384704, ABN 72 068 153 926). Liability limited by a scheme approved under Professional Standards Legislation.