Top reasons you need your private health insurance

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Private health cover helps fill in the gaps Medicare leaves

08 December 2021 6 minute read

Australia is known as ‘the lucky country’ – and it’s no different when it comes to our healthcare. Through Medicare, we can be treated in a public hospital as a public patient for no charge and receive subsidised prescription medicines and GP appointments.

However, Medicare doesn’t cover the cost of everything you might need to continue to be as healthy as possible. That’s where private health insurance comes in; it aims to fill in the gaps that Medicare leaves by helping you fund your healthcare needs.

First up, what even is health insurance?

Private health insurance is something you can purchase from a registered health insurer like nib. There are three main types of private health insurance, including Hospital cover, Extras cover or a combined cover including both Hospital and Extras cover.

Depending on the level of cover you select, with a private health insurance policy, you may be able to:

Be treated in a public or private hospital as a private patient
Have more choice when it comes to the treatment you receive in a private hospital setting, including where you stay and the doctor who performs your surgery (subject to availability)
Receive a benefit for health services that are not covered by Medicare, including appointments with a physiotherapist, podiatrist or dentist
Be covered in an emergency for ambulance transport and/or treatment
Skip the public hospital waiting list if you find yourself in need of non-emergency surgery

What does Hospital cover include?

1. Benefits for your hospital stay

Combined with Medicare, if you’re an Australian resident, your Hospital health insurance will help cover the costs associated with your treatment as a private patient.

If your chosen level of cover includes your procedure and you attend one of the nib Agreement Hospitals (or any public hospital as a private patient) nib covers you for:

Hospital accommodation (i.e. your bed and a private room if there's one available)
Operating theatre fees
Intensive care fees
Labour ward fees
Meals
Common treatments and support treatments¹
Associated treatment for complications and associated unplanned treatment²

If you’re an nib member, you should always check that your procedure is covered before you go to hospital and contact us, so we can help you keep any extra expenses to a minimum.

2. Emergency ambulance cover

If you’re in an emergency situation with an ambulance on the way, you might be in for the most expensive ride of your life. And, if you’re one of the 30% of Australians who think Medicare will cover the cost, you’re in for a shock.

If you’re not covered by your State Government, nib offers unlimited emergency ambulance cover regardless of what Hospital or Extras Cover you choose³ so if you sign up to nib, you’ll get the help you need, when and as often as you need it.

3. Cover in emergencies

While public hospital healthcare (including emergency treatment) is free to all Australian citizens and most permanent residents, if you need further treatment after your initial admission, that’s when lengthy waiting times can apply. Waiting for treatment has the potential to impact so many aspects of your life, including your ability to work, so avoiding public hospital waiting lists could save you time and money.

With nib’s Accidental Injury Benefit, you'll receive benefits related to the accident in line with our Gold Hospital cover within 90 days after an accident if you seek treatment with a medical practitioner or attend an emergency department within 72 hours of the accident and are admitted to hospital. This includes admission to a private hospital or as a private patient in a public hospital. It’s offered with every level of nib Hospital cover⁴.

For more information on your policy, head to Online Services or download the nib app.

4. Skip the public hospital waiting lists

Without the right cover, wait times for non-emergency treatment in the public system can be weeks and even months. And if you choose to go to a private hospital without the right cover, your treatment won’t come cheap. Taking out Hospital cover helps you avoid the long waiting lists you might experience in a public hospital. Data released by the Australian Institute of Health and Welfare showed that of the 25 most common surgeries in Australia during 2019-20, the longest waiting times in public hospitals were:

Septoplasty (surgery to fix a damaged nose): 277 days
Total knee replacement: 233 days
Myringoplasty (repairing an eardrum hole): 214 days

With the right level of nib Hospital cover, you choose when and where you get your surgery – meaning you can get back to work – and play – quicker.

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What does Extras cover include?

At nib, we offer a range of Extras covers so you can choose one that’s right for you and your family. However, there are some core inclusions that we pay benefits for across all our Extras policies, such as:

Emergency ambulance³
Preventative dental
General dental
Major dental
Optical
Physiotherapy

We know that everyone is different when it comes to their health, so outside the above core inclusions, we also offer a range of Extras covers that can provide cover towards the cost of popular treatments like osteopathy, dietary advice and orthodontia. Find out more in our article What Extras benefits can I get with nib?

Is there a tipping point in your life when you start needing private health insurance?

The peace of mind that comes with private health insurance is beneficial at any age, but you might have heard that it’s beneficial to take out a policy before turning 31.

That’s because if you don’t have Hospital cover by 1 July after your 31st birthday, you’ll pay a 2% Lifetime Health Cover loading (LHC) on top of the normal premiums for each year you don’t have Hospital cover up to 70%. The loading applies for 10 years of continuous Hospital cover.

This isn’t just with nib, but every health fund. So, if you wait until you’re 40, you’ll pay 20% more than someone on the same cover who joined when they were 31.

Find out more about how to avoid the Lifetime Health Cover loading.

What is the Medicare Levy Surcharge (MLS), and how might this affect your decision?

In addition, if your taxable income is above $90,000 ($180,000 for families) and you don’t have an appropriate level of private Hospital cover, you may have to pay the Medicare Levy Surcharge. This is an additional 1% to 1.5% in tax on top of the Medicare Levy we all have to pay⁵.

If eligible, you could avoid the Medicare Levy Surcharge – and pay less tax – by joining any nib Hospital cover and maintaining it for the full financial year. If you take out Hospital cover part-way through the financial year, (if eligible) you will avoid the surcharge for the period you held suitable Hospital cover.

Interested in becoming an nib member?

At nib, we encourage you to talk to our expert team about selecting a policy that best suits your needs and budget. If you're not sure where to start, contact us – we’re here to help. Alternatively, you can get a quote online in just a few minutes.

¹Common treatments include a number of Medical Benefits Schedule (MBS) items commonly used across services covered by your policy. Support treatments means a number of MBS items used to support a principal treatment covered by your policy. Common and support treatments will be covered in line with the level of cover your product provides for the principal treatment. Refer to the nib Policy Booklet for more information.

²Associated treatment for complications means treatment provided during an episode of covered hospital treatment to address a complication that arises during that episode. Associated unplanned treatment means unplanned treatment provided during an episode of covered planned treatment that is, in the view of the medical practitioner providing the unplanned treatment, medically necessary and urgent. Associated treatments will be covered in line with the level of cover your product provides for the principal treatment. Refer to the nib Policy Booklet for more information.

³ Not available to: (i) QLD residents who have ambulance services provided by their State ambulance schemes; (ii) TAS residents who are covered under state ambulance schemes in TAS and when travelling in mainland Australia except NSW, SA or QLD; or (iii) pension and health care card holders who have ambulance services provided by State ambulance schemes (check entitlements with Centrelink if unsure).

⁴Excludes consult at an Emergency Department or with a Medical Practitioner (e.g. GP). Accidental Injury Benefit criteria must be met for approval.

⁵ Visit the Australian Tax Office for specific rules for calculating income for MLS purposes.