What is the Difference Between Private Health Insurance and Medicare?

What is the Difference Between Private Health Insurance and Medicare?

Australia is known globally for our great Medicare public health care system – even Billy Explores uses Medicare funded doctors to give me check ups before I head on my expeditions! A lot of people have no idea about the difference between public and private healthcare systems in Australia. Sometimes it might just seem that ‘everything’s available’ under our Medicare system, which theoretically it is.

Of course, there are both advantages and disadvantages to both systems. It helps to have all the information before you make a decision to compare private health insurance providers, or whether just to stay with the public Medicare system. Thankfully we have managed to pull together this handy guide, to help you understand the difference between Medicare vs private health insurance!

What is Private Health Insurance?

Before we can answer that question of what is the difference between public and private healthcare, we need to understand what private health insurance actually is. Private health insurance protects you against unexpected costs associated with illness or medical treatment. You’ll be covered for all or part of certain medical expenses, depending on the level of cover you choose. You can choose to have both hospital cover and extras cover, or just hospital cover in your policy. You also have the option of individual health insurance cover, or family health insurance cover. Of course, you should always compare health insurance policies to make sure they fit your particular situation.

Medicare vs Private Health Insurance – Is there a difference?

As we mentioned previously, Australia is very lucky to have a great public health system which is funded under the Medicare system. This means that Aussies can be treated for a lot of healthcare issues. Some healthcare costs – such as a visit to your GP or an X-ray in hospital –can also be covered or partly covered by Medicare through the public health system, depending on your circumstances.

Private health insurance covers people for certain medical or hospital expenses that aren’t covered by Medicare, or where the patient chooses to be treated privately. Of course, there are both advantages and disadvantages of both systems – so it pays to compare private health insurance vs public system before you make your decision. Of course, you can also compare the types of health insurance from our panel of providers through Billy Explores too!

What is Health Insurance Extras Cover?

A key difference when you want to compare private health insurance vs the Medicare system, is that you can choose extras cover. It covers smaller medical expenses not covered under your general hospital cover. As with hospital cover, health insurance providers will offer different levels of extras cover, and it will include items such as:

  • Dental treatment
  • Medical equipment/appliances
  • Optical (such as glasses or contact lenses)
  • Physiotherapy
  • Alternative and Natural therapies (acupuncture, naturopathy)
  • Chiropractic treatment
  • Gym memberships and other health programs
  • Psychology
  • Pharmaceuticals not covered by the Pharmaceutical Benefits Scheme

If you know you are going to use a lot of these services, it’s a great idea to have the appropriate services covered under your health insurance extras – these extra aren’t covered under general Medicare. Just make sure you check out any stipulations such waiting periods.

What Are Some Advantages of Private Health Insurance?

Depending on your policy, private health insurance pays some or all of the costs of:

  • treatment in public or private hospitals as a private patient with the doctor of your choice
  • health services that are not covered under Medicare such as physiotherapy, dental and optical.

Private health insurance might also help you access some hospital services more quickly.

You can also pay less tax by not paying the medicare levy surcharge, and can avoid paying more for cover when you’re older through the Lifetime Health Cover loading system.

What Are Some Disadvantages of Private Health Insurance?

While there are many benefits to private health insurance, there are also some disadvantages. For example, the cost can be quite expensive, especially when you’re feeling you aren’t getting any value for money from your policy (of course, you can always compare health insurance through Billy Explores here to see if you can get a better deal from our panel of providers)! Also, some treatments may be excluded if you end up in hospital as well as you still have to pay any out-of-pocket costs. It pays to check the fineprint of your health insurance policy and make sure you have the right type of health insurance.

Can You Use Both Medicare and Private Health Insurance?

You actually use both Medicare and private health insurance if you’re treated as a private patient as well has be refunded under the Medical Benefits Scheme (MBS) link. Medicare also reimburses 100% of your fees under MBS for trips to the GP and 85% of the MBS fee for specialists. The MBS lists costs for medical treatment that the government deems a fair price for each service listed; however, medical professionals, doctors and clinics can set their fees above the listed MBS price.

For hospital stays, the same occurs. If you choose to be treated as a private patient, Medicare still is part of the process. Medicare will cover 75% of the MBS fee for any treatment listed on the MBS, while your health provider will pay the remaining 25%.

You may ask, “If Medicare covers such a large percentage of healthcare costs, what’s the point of getting health insurance?” The answer is simple: while Medicare does offer many benefits, it doesn’t cover everything.

How Soon Can You Use Private Health Insurance?

How soon you can start to use your private health insurance depends on how long a ‘waiting period’ you have agreed with your provider. Some benefits you can use almost immediately. With the majority of private health insurance plans when joining or swapping, you normally will have to sit out a specific waiting period for specific benefit items, or if you have a pre-existing condition. These are normally three or 12 months waiting period. Of course, some providers quite often offer promotions for new policy holders stating no waiting periods. See if there’s any on offer through our panel of providers here.

Is Private Health Insurance Worth Paying For?

It really depends on your situation – we do recommend it’s a good idea to have you and your family covered, so you have peace and security knowing you’re fine in case the unexpected happens. Here is some good information to help answer if you need health insurance in Australia.

While you will still be covered to have any procedures in the Medicare public health system, you will probably face a long wait time and will have to have your procedure in a public hospital. This can quite often lead to longer wait times for say elective surgery. In 2018-19, 890,000 patients were added to public hospital elective surgery waiting lists during, while only 760,000 patients were admitted for their surgery in the same period (Australian Institute of Health and Welfare (AIHW)).

You will also pay more tax through the Australia Government’s Medicare Levy Surcharge if you don’t have private health insurance, and you will also pay more for your health insurance premiums down the track through the Lifetime Health Cover loading.

What About Over 60s With Medicare and Private Health Insurance?

If you’re nearing your 60s, you should be fully aware of the difference between Medicare and private health insurance. But maybe you’re still asking? What is the difference between Medicare and private health insurance

If you do need emergency surgery, Australia’s Medicare is one of the best public health care systems in the world. But if the surgery you need isn’t an emergency and you can wait, you might have to wait a long time. This is one of the key differences between Medicare and private health insurance.

Even if you’re nearing 60, the Australian government urges everyone to get private health insurance. Private health insurance not only takes some of the load off of Medicare right now, but it will also help with the growing number of seniors who will need care and help in the coming decades.

Private Health Insurance vs Medicare (Public)

Well, now you know some of the difference between public and private healthcare, as well as some of the advantages and disadvantages of private health insurance and the public Medicare system. Of course, that means it’s also time to compare private health insurance options through our panel of providers! Billy Explores wants to make sure we have as many Aussies covered with the right type of health insurance for them – so get comparing today!