min read
· Posted on
February 21, 2024

Medicare vs private health insurance: Do I need both?

Do you really need private health insurance in Australia? Depends who’s asking… Let’s break it down.

What's the key learning?

Ahhhh Aussies, we’re known for our love of the beach, booze, barbeques and bragging about Medicare… We’re lucky enough to have a flippin’ fantastic public healthcare system in Australia, buuuuuut Medicare doesn’t cover everything

Ever showed up for a routine dental checkup only to find out you need work that’ll cost an arm and a leg? Yep, that’s like a thousand stabs in the heart. But it’s also where private health insurance comes in…

What is private health insurance?

Just like other types of insurance, private health insurance is where you pay a premium to insure against a certain set of circumstances. In this case, private health insurance usually applies to things like private hospitals, going to the dentist and using allied health services (like physio or chiro).

Yes, private health will contribute towards your payments but it generally doesn’t cover the whole lot - you’ll also need to pay a ‘gap’ payment.

Are there different types of private health insurance?

Yep! The main types are hospital cover, dental cover and extras cover. Many policies roll all three into the one premium, but you can also get all three at once or various combos of two. When you’re deciding what type of cover to get, it’s best to think about which kinds of cover you’ll actually use.

What will private health insurance get me that Medicare won’t?

Private health insurance may let you…

  • Choose which doctors and surgeons treat you
  • Choose which hospital you go to
  • Get elective surgery sooner - aka avoid ridiculously long waitlists
  • Pay a lot less for extras like dental or physio

But is private health insurance worth it?

Over 53% of Aussies have some form of private health cover - that’s almost 14 MILLION people! 

And it has a lot to do with the Medicare levy surcharge. Most Aussies pay the Medicare levy, but if you earn above the threshold ($90k for a single or $180k as a couple) you’ll have to pay an extra surcharge too - of up to 1.5% of your taxable income.

So if you’re a high income earner, getting private health insurance might actually be cheaper than paying the surcharge. Smart move, Aussie government.

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