Private health insurance plans – are one of the least understood aspects amongst millennials about adulting! They are something that might spring to mind along with greying hair and retirement homes. Getting older is not on your radar! You are entering a new life stage which can be exciting – from landing your first job to moving into your first home. However, growing older can mean readjusting priorities and considering new products to secure your future – like private health insurance. 

But what exactly is it? And why should you be thinking about it, now?
Well, according to Private Healthcare Australia, over 13.5 million Australians have private health insurance, accounting for as much as 54% of the Australian population. And it’s proven helpful.
For example, the pandemic showed us the importance of a health insurance policy to cover medical costs, and many young people were significantly affected. 

The millennials are typically criticised for their fast lifestyle, where they prioritise spending over saving for the future. It is also a stereotype that youngsters ignore buying health insurance plans. However, many millennials know the importance of a robust health insurance policy, especially after the Covid-19 pandemic. 

But although many youngsters are willing to purchase a private health insurance policy, most find it challenging to compare and select the right policy – we are here to help!

What is Private Health Insurance?

You may have seen advertisements for private health insurance on TV or online but didn’t have to dig deeper for any information, because it wasn’t relevant to you. Well, now that you know it is important, let’s get started on helping you get prepared.

To begin with, Australia’s healthcare system is semi-privatised – that means it is made up of both government-funded healthcare, known as Medicare, and private healthcare, funded by individuals.

Private health insurance is a type of insurance that can provide Australians with coverage for a broad range of health services. If you need to be admitted to the hospital, private health insurance allows you to be treated as a private patient. 

Private health insurance is an additional level of coverage that can help you pay for treatments and procedures that can crop up unexpectedly in life that Medicare does not cover. Medicare covers Australians and eligible residents for in-hospital treatment and subsidises specific out-of-hospital treatments. As per the Australian Government Services website, you can enrol for your Medicare card once you are over 15.

With private health insurance, however, you can be treated in a private or public hospital and have more control over your treatment, such as choosing your doctor and avoiding long waiting lists – getting you back to work and life much faster. Private health insurance also covers many out-of-hospital treatments that Medicare does not, such as optical, dental, imaging and physiotherapy.

Where Do You Buy Private Health Insurance?

Private health insurance in Australia can only be purchased through registered health insurers, according to the Australian Department of Health. You can also compare different insurance health plans online and select the best plan for you.

What are the Benefits of Private Healthcare Insurance for Millennials?

There are various reasons for wanting to purchase private health insurance, aside from receiving coverage for specific types of treatments. Some of the most common advantages are:

1. More Health Coverage and Options

Depending on the type of policy you choose, you can select your own doctor, whether you’re being treated in a public or private hospital. And as mentioned, your policy can cover health services not covered by Medicare. 

2. Paying Less Tax

You will not have to pay the Medicare levy surcharge if you have private health insurance. This is a tax of up to 1.5% on taxable income if you earn more than a certain amount each year. If you are working on a budget; paying less tax means saving more money for your future plans.

3. Getting a Rebate

Suppose your income is below a certain level, or you choose a policy that includes hospital or general treatment coverage. In that case, you may be eligible for a rebate from the Australian government. This is reflected in your tax return, lowering the tax you pay, which is great!

4. Avoid Paying More Later

Buying private health insurance before the age of 31 will make you eligible for Lifetime Health Coverage (LHC). This is a government programme that assists you in avoiding paying higher premiums for private health insurance as you get older. Although this may seem a long way off  right now – it doesn’t hurt to plan for the future as early as possible.

Conclusion

Whether you want to invest in private health insurance or stay with Medicare – is ultimately up to you to decide, as it depends entirely on your circumstances and budget. Generally speaking, if you are healthy and comfortable with the present level of care and services available through Medicare, you might not see any advantage from having private health insurance. Take a close evaluation of your needs to be sure you are making the best choice for you at this time in your life.  A few minutes today, could make all the difference tomorrow.