What’s the Difference Between Private and Public Health Insurance Plans?

Private insurance is a way for Australian citizens to get additional health coverage and benefits that aren’t covered under Medicare. While the United States relies on the Affordable Care Act (ACA) to connect its citizens with health insurance, and its version of Medicare to help citizens aged 65 and over afford health care costs, Australia uses a different version of Medicare. Essentially, Australian Medicare is Australia’s public and universal health insurance solution.

Under Australian Medicare, citizens and some foreign visitors will receive free emergency treatment in public hospitals, as well as free or reduced-cost services from general practitioners and prescription medication providers. The Medical Benefits Schedule provides greater details on all the services provided by Medicare, and it’s important to point out that anyone in Australia can currently receive a COVID-19 vaccination, regardless of whether they’re eligible for Medicare. It’s also important to realize that Medicare won’t cover everything that citizens may need, and there are gaps in coverage for certain services and procedures. This is why purchasing private insurance from an outside insurance company or health fund can be a good idea. Here are some of the advantages you can expect with private coverage.

You’ll be covered for services outside of hospitals.

One of the greatest advantages of private health insurance is that you’ll be covered for the gaps in Medicare that tend to reveal themselves when you look for health services outside of hospital treatment or a regular checkup at a general practitioner. For example, you can purchase additional coverage for dental visits, which will be important since your universal health insurance coverage won’t cover even the most basic visits like dental checkups or teeth cleanings.

If you wear glasses, then you’ll definitely want to look into additional vision coverage. Medicare will provide subsidies for a simple eye test performed by an optometrist, but it won’t cover the costs of getting glasses or contact lenses. Depending on your needs, you may be able to find private vision coverage for as little as $5 a week, so it’s well worth looking into. Of course, if you have several family members who need glasses, you’ll need to opt for a more expensive health fund to get coverage for everyone. You’ll also need private health coverage to cover hearing aids.

You can have ambulance trips covered.

If you require emergency medical attention and an ambulance transports you to a public hospital, you should be aware that Medicare generally won’t cover this. The only areas where ambulance cover is provided standard are Queensland and Tasmania. If you live in any other states or territories, you’ll have to take out private ambulance coverage yourself. Ambulance coverage is generally sold as its own insurance policy, rather than being included in a package.

Speaking of hospitals, though, with private health coverage, you won’t have to rely on public hospitals. With your own insurance, you can receive medical treatment in a private hospital with your own room, and you can even select your preferred doctor for treatment. Of course, these options will vary depending on the availability within the private system.

You can avoid additional charges.

Australia has systems to encourage individuals and families to take out private coverage in order to take some of the strain off the public healthcare system. One of these is the Medicare levy surcharge. This is an additional tax of 1 to 1.5% for individuals and families who make above the income threshold and lack proper private coverage. The threshold is $90,000 for individuals and $180,000 for families.

You may also want to purchase private hospital coverage before the age of 31 in order to avoid lifetime health coverage loading. If you decide to take out hospital coverage later in life, you’ll pay an additional 2% loading fee on top of your regular premium for each year you delayed past the age of 31. LHC loading can go up to a 70% increase in premiums, but it will go away after 10 consecutive years of having hospital coverage.