Medicare good enough?

[Steve-o]

I've seen private health insurance discussed several times on the forums. My question is why is Medicare only is not good enough for your circumstances? And if you do only have Medicare why is that enough for you?

[RYLC]

Medicare is enough. It is just that people earning over a certain amount per annum have to pay an extra 1% tax if they don't have private medical cover. So people take out a small policy to avoid the extra tax.

People on say a 457 don't qualify for Medicare and have to have their own private medical cover as one of the visa requirements.

[AFreshStart]

Steve-o,

It's been covered in various threads, but the first port of call is to see what Medicare DOESN'T cover and see if those are needed.

These include:

• dental treatment;
• ambulance;
• chiropractic treatment;
• home nursing;
• podiatry;
• physiotherapy;
• occupational therapy;
• speech therapy; and
• glasses and contact lenses

Private Health cover covers these in some capacity and give you the flexibility of going to either a Private or State Hospitals.

According to a recent study by the APRA the majority of private insurance claims come from the age group of 60 - 79 year olds, the largest component going to dental care, followed by optical, physiotherapy and chiropractic.

Of course NOT taking private health care also means you may be loaded with premiums and their are tax benefits for taking private medical cover.

Then there are the wait times, an example often used is knee or hip replacement. These are considered "Non life threatening", Medicare covers them, but the average wait time is is over 190 days, more than 10% of patients have been on the wait list for a year.

Life threatening, no, but a major discomfort to your quality of life.

At the end of the day, to each their own, but those might help you make an informed decision.

Cheers

Matt

Edited November 3, 2015 by AFreshStart

[Gerhardk]

The surcharge over certain income levels starts at 1% up to 1.5%, see link for levels and rates. Keep in mind it is family income so you and your spouse.

https://www.ato.gov.au/Individuals/Medicare-levy/Medicare-levy-surcharge/Income-for-Medicare-levy-surcharge,-thresholds-and-rates/

It is generally (if not always) cheaper to have private health rather than pay the levy.

We went for private health from the start partly since HBF waived all waiting periods since we were on Discovery and we decided the luxury to choose your own obstetrician and have our own room was worth it, in addition all what Matt noted above.

[Bob]

When you're twenty-one, you think you're bullet proof and going to live until you're five hundred years old . . . . or so it seems, at the time.

As you get older, you realise that accidents happen, you have kids, you wear out.

By the time you're in your sixties, you're making a trip or two to a hospital for this, that or whatever. This is life.

Medicare is only a "no frills" health care service. It's not designed to be more, so don't expect it so. Medicare doesn't cover ambulance travel in most states of Australia and it doesn't include dental work or eye glasses / contact lenses on a regular basis.

Also, when you're twenty-one, you are in your prime of life and a hospital trip invariably is because of an accident (rugby, beach, car).

If you require treatment which isn't life threatening, and it can wait (such as a knee operation, or hip replacement), you can be waiting quite a while until a surgeon is available in the public health system to perform the operation. Medicare will pay for it, but you may be waiting a year or two.

If however, you want your surgeon to operate on you sooner, you can book into a private hospital and elect to have your own surgeon come in and perform the op.

This is where private health insurance comes in.

There is no extra charge if you are an invalid, or if you are old, or sick. The health insurance premiums are the same for all Australians living in that state. Premiums do vary from state to state across Australia, but that is the only variation allowable by law.

Young healthy people don't really need health insurance, because they don't go to hospital from one year to the next. However, if only the old and infirm were to take out health insurance, it would be very expensive, so the Australian gov't allows all young people in their twenties to join up and not pay a "loading" on their premiums.

Once you turn thirty-one, a 2% extra loading on your health insurance premiums kick in for each year you are older than 30, if you are only joining then. If you joined before your thirty-first birthday, then you can pay your premiums for the rest of your life without any extra loading . . . . just paying the base premium health insurance rate.

If you are 45 and think you might need an operation, Medicare will put you on the waiting list. If you're not happy with that and join a health insurance fund and start to pay the insurance premiums, 15 years over your 30th birthday x 2% = 30% extra loading on your health insurance premiums for the next 10 years . . . . . Ouch!

That is why most Australians begin to take out health insurance in their 30th year, so that they can pay only the base rate of health insurance for the rest of their lives without copping a penalty for joining later in life and paying a loading of 2% for each year they are older than 30 years old.

Edited November 4, 2015 by Bob

[RedPanda]

And if you are over 30 when you immigrate, they give you a certain grace period within which to join without incurring the loaded rates either.

[Bob]

You need to get in touch with a health care fund and ask how long you can live in Australia before there is any "loading" attached to your health insurance premiums, if you're over 30 years old.

There is a certain period of grace before you can join without paying the extra loading, but I'm not sure personally what that period is . . . . 3 months?? one year ????

If you join up after that period of grace has expired, the loading is on your premiums for the next 10 years.

[monsta]

I don't use private hospitals for good reason. It's called "bill shock". We looked into having a kid through a private hospital. Our health fund pointed out that we could be out of pocket several thousand dollars if there were any complications with the pregnancy or delivery.

What really convinced us to skip private was that if your baby needs the ICU, they send you over to the public hospital anyway?!? We would rather just go to the hospital that has all the facilities, even if we don't get to choose our doctor.

[Bob]

I have relatives in South Australia that have always relied solely on Medicare for all their health concerns.

We have chosen to have private health, for a reason.

My sister-in-law in South Australia now needs a hip replacement and is on the waiting list for the next available surgeon as hips aren't life threatening. She can wait, and has done so now for over a year, taking pain killers all that time.

My wife needed a knee replacement two years ago. She could have waited . . . and waited . . . until a surgeon in the public system was available. She chose to get it done by a surgeon she trusted to do a good job, in a private hospital without a long wait. She doesn't take pain killers any longer.

It's true for really serious cases, patients are rushed off to a hospital with the advanced medical machinery to help the patient survive, and that medical apparatus is usually in the public hospital system.

There are cases when urgent medical care is needed, so private hospitals will liase with the nearest public hospital in some instances.

However, that doesn't get you looked at if it's not urgent. You must wait in the Medicare system. Too bad if you are in pain. Take pain killers over the next few months.

I worked with two blokes, both needing heart ops. One had private health, the other saved his money and relied solely on Medicare.

The fellow with private health got a triple by-pass operation done soon after his GP and specialist advised him. The other bloke was put on the waiting list until he could go into a public hospital and have a heart surgeon available to perform his triple by-pass.

Last time I knew them, the bloke with private health had a successful heart op and was still very much alive when I took early retirement nine years ago.

The bloke relying on Medicare died while he was waiting for his heart op to become available.

There was a big lesson in this case to all of us in the work place at the time, and we all saw the value of private health over and above Medicare, which is only a "no frills" service.

The Australian gov't also pays 30% towards your health insurance premiums, making it more affordable for the man in the street, who only has to pay the remaining 70%.

I say to my three kids that you either pay 70% of your health insurance premiums . . . . . or 100% of the hospital bill if you go into a private hospital for an operation because you can't / won't wait.

Also, the cost of insuring for a family is the same as for a couple. If you have three kids for instance, then all five people (Mum, Dad & 3 kids) don't pay any more than an older couple without dependent kids any longer.

Anyone with kids in Australia without private health is like someone who drives without insuring their car. . . . . . cheap, until a calamity happens.

Two of my kids needed braces, one needed speech therapy. Each of them went to a podiatrist. Medicare covers none of these treatments.

Edited November 4, 2015 by Bob

[Nev]

Yep, i agree with Bob, we have private medical for our entire family, this gives us the option of private if we want to use it, for example non life threatening hospital stuff,

We have found that childbirth and infant medical is just as good and efficient through public as private though, so we are using public for the little one, and if you go private there is none of this all expenses paid stuff like you get in RSA, you still have plenty of bills you need to pay in on.

[Sunnyskies]

I agree with Bob. I use my private health cover card more than my Medicare card.

On the odd occasion when we have needed to go to hospital it has generally been to public if it is an emergency, otherwise private as we don't have to wait although there are surcharges and costs for our own account. I find it interesting that even if you go public they ask if you have private cover and in fact public then makes a claim on your private health cover for their services, but at least there is no surcharge.

Be warned that health cover is expensive in Aus. I pay my medicare levy and then almost an equal amount on private health cover and I still have to contribute from my own pocket. However, the service is generally very good.

[21yearsoutofrsa]

You can refuse to give your private health provider details. In fact you should as it will increase your premiums. You pay medicare levy, that is enough for the public system.

[Bob]

You can refuse to give your private health provider details. In fact you should as it will increase your premiums. You pay medicare levy, that is enough for the public system.

I tend to agree.

You've chosen to go to the public hospital. If you'd have chosen to go private, you'd have gone to a private hospital.

It is just the hospital administration and State government trying to save money.

You pay income tax and the 2% Medicare levy on your wages and this is collected by the federal Australian government, but on federation in 1901, the six States that made up the Commonwealth of Australia insisted on keeping certain powers and not surrendering them to the new federal Commonwealth . . . . police, health, education, roads, railways among others.

This is still the case over 100 years later, and the local public hospital (as well as the police and local primary and high schools) is the responsibility of the State gov't.

Some States are more in debt than others, so tend to try to get people to pay for themselves by asking if they have private health cover and charging them accordingly.

Under Medicare, public hospital treatment is free across Australia and you shouldn't be required to pay for service there.

In effect, what it does is lessen the cost for the hospital and the State that is responsible for its services and puts the cost on the private health funds, pushing up insurance premiums accordingly next year.

Edited November 5, 2015 by Bob

[RedPanda]

Thanks for the heads-up, we'll probably also use both, but rely more on public, especially while we're young and any medical care needed is more likely to be an emergency.

[Mara]

I have gone the public hospital route... just be aware, it was definitely not my greatest experience.

Had an emergency hernia operation, ended up in the surgical section in a room of six people, three men, three woman, who all had to share one bathroom. I will not bore you with the state of the bathroom, most of the time. Then it is the snoring, coughing, bells going, nursing staff running around... need I go on?

I have been happy, after the above experience, for my medical insurance to pay for me as a private patient, so that I can request a private room... thank you!

[TinaB]

Can anyone give an example of what the private health care costs for a amily of 4?

[Peterthe1]

Can anyone give an example of what the private health care costs for a amily of 4?

Have a look here

http://www.privatehealth.gov.au/dynamic/compare.aspx

​

[MelG]

ThanX for this great post.  We have been researching this very subject.   I can confirm that as an immigrant, if you join a medical aid within the first year of settlement, you will be exempt from the age-loading.   You need a letter from Medicare to confirm when you joined up, to accompany your application.

 

Also, it seems, one can tweak one's cover as you go, from month to month even, though I am not sure of the finer details of this.  There appear to be waiting periods on some offerings.  So you could just take a hospital cover to start, and if you decide you need dental, upgrade your package to cover such although you may have to wait 6months before you can actually use the benefit.  

[Mara]

Please always remember, Medicare is great if you have an emergency, but you can wait months or even a year or two for any elective surgery, ie., non urgent.  Also be aware that Medicare does not cover you for any dental work, except for routine fillings and extractions for children, I think the cut off is around 14, but not sure. They definitely do not cover orthodontics.

Edited October 6, 2016 by Mara

[deej1]

Howsit guys, this is a great post.

 

Am I right in saying - if you have private health care then you don't have to pay the medicare levy?

[Mara]

No, deej1, you are wrong, the one has nothing to do with the other. You only get out of paying the medicare levy if you are here on a 457. When you do your tax return your medicare levy is calculated, it is normally 2% of your gross wages, and has to be paid.

[RedPanda]

23 hours ago, deej1 said:

Howsit guys, this is a great post.

 

Am I right in saying - if you have private health care then you don't have to pay the medicare levy?

There is another thing, separate, that might confuse you. If you don't take out private care before something like 30years old, then your medicare gets loaded and you pay more for it. But you can't not pay medicare.

[deej1]

But if you look at this link it says otherwise: http://www.privatehealth.gov.au/healthinsurance/incentivessurcharges/mls.htm

 

What am I reading that's wrong? 

[deej1]

Having reread the article I see my mistake. The article is in relation to a surcharge over and above the medicare levy (may need glasses).

 

 

Edited October 18, 2016 by deej1

[RedPanda]

14 hours ago, deej1 said:

Having reread the article I see my mistake. The article is in relation to a surcharge over and above the medicare levy (may need glasses).

 

 

Yes this is the case, and as far as I know, they only start loading you after your 31st birthday, increasing by some formula for every year after that, that you don't have a private hospital plan. But that site certainly does not make this very clear. I wouldn't be surprised if the confusion gives them more clients.

So to my knowledge, everyone pays tax for Medicare, but after 31 years of age you will pay additional tax if you don't have HP. I also think they amount of tax you pay for medicare depends on your income, so it's possible you can pay more for medicare before 31, if you earn a lot.

But I think you should wait/ask for more replies on this topic. Get someone else to weigh in as well. (after all, I'm not an accountant or a tax person, I'm just telling you what I read)

Edited October 19, 2016 by RedPanda
Edit: Crossed out a stupid comment, because I didn't read that the info came from the government instead of a private insurer.