Private health insurance – one of the most poorly understood aspects of #adulting among young people in Australia, am I right? Aside from the wrinkles and ticking biological clock, it’s one of the worst things that springs to mind when thinking about turning 30.

Today I’m going to chat about the beast that is private health cover. I know, I spoil you with such riveting themes.

So What Exactly is Private Health Cover in Australia?

In short, Australia’s healthcare system is semi-privatised – so it’s made up of both government funded healthcare (Medicare) and private healthcare funded by individuals. Basically, we are very, very lucky that we are not America.

Private health cover is an additional level of cover that can help you pay for things that Medicare won’t. Medicare covers Australians and eligible residents for treatment provided in a public hospital, and it subsidises selected out-of-hospital treatments. Having private health cover means you can be treated in a private hospital OR a public hospital, and have greater control over your treatment, like choosing your own doctor and avoiding some lengthy waiting lists. Private health also covers many out-of-hospital treatments on a higher level than medicare – like optical, dental, imaging and physio treatments.

Hospital Cover vs Extras Cover

Private health insurance in Australia is generally split into two parts – hospital cover and extras cover, the latter also known as ‘ancillary’ cover or ‘general treatment cover’. You can choose to have varying levels of cover for both hospital and extras. The most basic levels of cover will include basic hospital cover and no extras, while more comprehensive (read: expensive) policies will have gold-level hospital and extras cover, meaning more is covered and at a higher level.

Do I Have to Get Private Health Insurance?

No. You’re never required to get private health insurance, but once you reach 30, you’ll pay a Medicare surcharge on your tax return if you don’t have adequate private cover. This charge increases with age, but is offset by your private health cover, which is why a lot of otherwise healthy people have a policy.

Should I Get Private Health Cover While I’m Under 30?

I imagine this is one of your biggest concerns if you’re reading this article – it’s definitely one of mine. Knowing whether or not to have private health is tough, especially when you’re on a very average income in your twenties and don’t have a ton of cash to burn on insurance you may or may not use. Plus you’ve got that generational obligation to brunch at least thrice weekly – so there’s that to factor in, too.

There is a tool you can use to assess whether or not you’d be better off taking out private health insurance, though this does assume you don’t fall into a state of ill health in the near future.

A lot of young people under 30 – me included – don’t take out private health because the premiums would be too high to be worth it. If you don’t wear glasses and don’t regularly have alternative therapies, physio sessions or other out-of-hospital treatments, there’s a good chance you’re better off just paying the difference between the Medicare rebate and your bill.

As an example, I’ve had a few osteopath appointments and two fairly major imaging tests done (ovarian and breast) in the last couple of years, and I’ve been better off just paying for those than having private health. If you’re interested to know the details, the breast ultrasound was covered by a Medicare rebate of about $120, so I paid about $200 on top. The ovarian ultrasound was also covered by a rebate, so my out-of-pocket expense was about $120 for that one.

Will Private Health Insurance Cover Me If I Get Cancer?

Okay, I know it’s morbid, but I reckon I’m not the only one who’s Googled this! I expect one of the biggest concerns when it comes to private health – and one of the hardest answers to actually get your hands on – is whether or not your cover will help you if you get really, really sick.

It’s all very well having some flashy optical cover or getting a few bucks off your physio appointment, but if I’m honest, all I really care about is whether or not I’ll die at the hands of being broke and unable to afford private health insurance.

Basically, and I’m sorry for the vagueness of this answer, but it depends. It depends on the level of cover you have at the time, the type and grade of cancer (or other illness) you have, and what kind of treatments you’ll be prescribed.

However, take some relief in the fact that Medicare will cover you to be treated in a public hospital, and something called the Pharmaceutical Benefits Scheme helps you pay for medications and treatments associated with illnesses like cancer. The difference if you did have private health insurance would be that you may be able to skip waiting lists, choose a specific doctor, and have the choice of being treated in a public OR private hospital of your choice – though for high level cancer cover to be included, you’ll probably need to be on a fairly comprehensive level of cover.

Have I Got Private Health Insurance?!

For me at this moment on a very normal salary and at age 27, I simply cannot afford the comprehensive covers that I’d really like to protect me at the level I’d like. That said, I’m only two and a bit years from 30, so I need to take out some kind of policy in the near future to avoid paying the Medicare surcharge, and really, I should be looking at protecting myself.

The best way to take out health insurance – or any insurance for that matter – is to call and speak to a representative directly, and ask all the nitty gritty questions you need about what’s covered and what isn’t on different policies. There’s no one-size-fits-all solution for health insurance, so make sure you get specific with your policy.

What About Ambulance Cover?

Ambulance cover is different to private health cover. A big mistake a lot of young people make is assuming that they’re still covered on their parents’ private health/ambulance policy, but unless you’re in eligible full time study, you’re not covered.

And no, you can’t just ‘pretend’ you’re still a student. If you have a car accident and get sent to hospital in an ambulance, they will find out you are not covered, and you’ll be liable for a hefty fee. Like, thousands of dollars.

There are some private health insurance policies that include ambulance cover, but as a general rule it is a separate policy. Do not assume that because you have private health you automatically have ambulance cover! Rookie mistake!

If you’re reading this and you’re unsure whether you have ambulance cover, check with your private health provider now, and if not, research your state’s ambulance membership service and sign up. In Victoria, it’s Ambulance Victoria, and a singles membership is around $45 for the whole year.