How Much Should I Spend on Private Health Insurance?

How Much Should I Spend on Private Health Insurance?

With so many bills starting to pile up, the question of how much should I spend on private health insurance is always in the back of your mind. It is a very open ended question, as the cost of private health insurance varies based on cover type and tier, your age and income, how many people it covers, where you live and more. Of course budget also comes into the equation. Billy Explores is here to help you find out more costs of private health insurance premiums, but also compare health insurance. Read on to find out about the types of health insurance and how much you should be paying for your private health insurance.

What Actually Is Private Health Insurance?

Before we can answer that question of how much should you spend on health insurance we need to understand what private health insurance cover actually is. 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. Check out more here.

Of course, you should always compare health insurance premiums to make sure they fit your particular situation through Billy Explores!

What Is Hospital Cover In Private Health Insurance?

Hospital cover is available in four different tiers: Gold, Silver, Bronze and Basic.

Hospital cover helps take care of the costs associated with medical treatment in private hospitals. It can be extremely beneficial if you find yourself in hospital for any period of time. Hospital bills can run into the thousands of dollars. With private health insurance hospital cover, you may only need to pay a small excess for your stay.

Each tier covers a government-mandated list of treatments, making it easier to compare health insurance premiums.

Basic Hospital Cover: Receive treatment in a private hospital without being subject to public hospital waiting lists.

Bronze Hospital Cover: The same as basic cover, but you’ll get some added benefits. Each provider will offer slightly different inclusions such as choosing your preferred doctor/specialist. There are, however, minimum treatments that all insurers must offer.

Silver Hospital Cover: Everything from basic and bronze, but more included treatments.

Gold Hospital Cover: The best of the best – you should be covered for any medical expenses that Medicare covers.

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

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.

How Much Should I Be Paying for Health Insurance?

Billy has heard a good rule of thumb for how much you should be spending on health insurance is 10% of your annual salary. But of course, there are lots of things you need to consider when deciding how much to spend on private health insurance (of course, you can always compare health insurance through Billy Explores too!)

Other factors that can impact how much you should be paying for private health insurance includes your income, age, health status, and eligibility restrictions.

But to give you a good guide, in 2020, the average national cost for health insurance was $456 for an individual and $1,152 for a family per month. Of course, this has many different factors in it! Read more below.

Will I Pay More For Private Health Insurance Because I Have A Family?

There are many different reasons why your private health insurance premiums will be so different to anyone else. A single person will have less of a health insurance premium than a couple (who will require cover for two people not one person).  A family with specific health insurance needs will also have a different health insurance premiums to the family next door to them, with amount of family members covered under their health insurance premium and any other specific requirements (ie more dental coverage or vision coverage). Don’t forget though, that some family members under 30 might not need insurance themselves so it pays to check it out!

Will I Pay More For Private Health Insurance Because I Have Specific Health Issues?

Unfortunately yes. For example, if you need more dental coverage or vision coverage, then you will need to pay for that as part of your health insurance premium. Also, the more you need to claim on your health insurance or because of pre-existing conditions, the more you will need to pay for your health insurance premiums now and into future too.

What Additional Costs Or Savings Are There With Health Insurance Premiums?

Of course, it depends on your policy, but private health insurance pays some or all of the costs of:

  • treatment in private or public 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.

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.

Depending on your level of cover, you might also have to pay out 0f pocket excess for any services (both under hospitals and extras). It is definitely worthwhile to compare through Billy Explores!

How Can I Compare Health Insurance And Get a Better Deal?

We’re glad you asked!! Of course, it’s a great idea to compare health insurance deals to see if you can get a better deal, and this is where Billy Explores can help! Through Billy Explores, you’ll be able to access a range of Hospital and Extras Insurance policies and compare health insurance deals from our panel of providers. Find if you can get the best health insurance deal for you here.