The Benefits of Cheap Medical Insurance

Private health insurance offers individuals and families with many advantages compared to relying on Australia’s public healthcare system also known as Medicare. Currently for approximate $100 each month an Australian can get covered with a cheap health insurance policy and receive benefits from improved hospital treatment as well as the cost of many services such as seeing a dentist.

* The price shown is per week and applies to a {LIFESTAGE} living in VIC with a $500 excess. It excludes LHC loading and includes a Base Tier Government Rebate

It should be noted that Australia’s public hospitals are one of the best in the world and provide a great service as a ‘safety net’ for all Australians. The public system though does have funding gaps and shortfalls such as non-emergency procedures/treatments can require individuals to wait for long periods (sometimes months). Visits can also incur fees when a ‘gap’ exists between what the charge is and the amount Medicare provides which will need to be paid by the patient.

For most individuals, receiving treatment at a private hospital/clinic is not an option due to the high costs. Even if you have an emergency, the prices of private hospital fees remain which can run up to thousands of dollars just for a short stay. Many cheap medical insurance policies pay for some or most of the costs at a private hospital. An option even exists with Frank for certain procedures to be covered in a private hospital while others allow treatment as a private patient in a public hospital.

Better Hospital Accommodation

Most health funds such as Frank provide a variety of cheap medical insurance policies that differ when it comes to hospital accommodation options. As discussed before, some policies provide the option of treatment only in a public hospital (as a private patient), some offer treatment for only some procedures in a private hospital while others offer private hospital treatment for most procedures. All of these options provide better hospital cover then Medicare with elements such as the choice of having your own room (and in most cases ensuite) and other elements such as TV etc.

Though there are provisions for initial out of pocket expenses like excess fees and co-payments in most budget policies, the final bill with be dramatically lower than if you only had Medicare. Most insurance policies can cover most of the daily room rate and overall hospital fees. It’s just worth noting your annual benefit limit.

It is important to read the medical insurance policy document to understand what hospitals are aligned to the cover. For example, Cabrini in Melbourne is GMHBA aligned hospital but the same hospital may not have agreement with another fund. This is critical if you have a hospital you want to get treated in future or to understand when you do get sick or injured.

Skip Waiting Lists at Public Hospitals

A common misconception that the cheapest medical insurance policies are a waste of money because they only cover public hospital stays. This is far from the truth because when you do get admitted to one of these hospitals it is at as private patient. This means that you may be able to skip the public waiting lists for most treatments. This is especially important for families who don’t want to see their child in any circumstance in pain or discomfort for long periods when its preventable.

Lower Taxes

It doesn’t matter if you have a cheap medical insurance or an expensive policy the tax implications (savings) are the same as long as you have hospital cover. The Medicare Levy Surcharge is applicable to all Australian’s once their income rises above a certain level. This can be up to 1.5% so for example if someone earns $150,000 they will have to pay an extra $2,250 in tax unless they have medical insurance with hospital cover.

As you don’t have to pay the Medicare Levy Surcharge when you have any hospital cover policy it can be cheaper to have cheap medical insurance than just Medicare. It is best to talk to your accountant, especially of the upcoming changes to the system on the 1st of July when the surcharge will increase further.

Save on Future Health Insurance Premiums

People over the age of 31 who have not taken out private health insurance will need to pay higher insurance rates later in life then someone who had help and kept their cover. The government’s Lifetime Healthcare Cover (LHC) initiative encourages Australians to get health insurance by imposing a 2% LHC loading for every year past the age of 31 they are not covered.

For example, if you’re only starting to pay for private health insurance at the age of 40, your insurance premium will cost 20% more than the standard rate. The maximum loading is 70%, which will only occur if you’re only starting to take out a policy at 65 years of age, 35 years past the required age of 31.

The LHC loading will only be removed after 10 years of continuous private cover, which is a significantly long period of time. The additional costs over the long term could instead have been used on a better insurance policy or maybe even a few holiday trips. So whether you are single or just starting to think about having a family, getting private health cover by the time you hit 30 is essential.

Ability To Claim On What You Already Use

While the cheapest medical insurance policy will only provide hospital cover, you can also choose to get coverage on everyday services such as dental, optical, chiropractic, physiotherapy and alternative therapy treatments. This is termed extras policy and will mean you receive a percentage back when you require these services or goods such as prescription sunglasses.

This will translate to these services becoming less expensive (as your out-of-pocket) less which will encourage you to use them. As prevention is better than cure (especially when it comes to areas such as dental) extras cover is a great way to ensure you maintain your health over time.

Overall, Cheap Medical Insurance Is Great Value

When you consider all the factors of health insurance from treatment to tax it overall offers great value to all Australians. That said, having the most expensive policy isn’t always necessary with many cheap medical insurance policies providing great value that is appropriate for many individuals. It pays to compare policies to find the right one for you.

Skip 2 & 6 month waits on extras* when you join on combined cover by April 30

*For new members (if you have been a Frank Health Insurance member in the last 12 months, sorry you don’t qualify). 12 month waits, annual and sub limits apply. Offer ends 30 April, 2018.