The Australian Medicare system provides free or subsidised medical treatment for all permanent residents. Anyone living or working in Australia (even temporarily) who isn’t eligible for Medicare treatment and who doesn’t like living dangerously should have private health insurance.
If you’re living or working in Australia and aren’t covered by Medicare, it’s risky or even foolhardy not to have private health insurance for you and your family. Whether you’re covered by an Australian or foreign health insurance policy makes little difference (except perhaps in cost), provided you have the required level of cover, including international cover if necessary.
If you plan to stay in Australia on a long term basis and come on a skilled visa (such as a 457 visa) you must have 'adequate health insurance' for the duration of your stay. When you apply for the skilled visa you need to attach a copy of your health insurance policy as proof that you will meet this requirement upon your arrival in Australia. It is important that your health insurance policy meets the requirements for your particular visa. 457 Visa Compared is a comparison website which only compares policies that meet the required standard.
If your stay in Australia is short, you may be covered by a reciprocal healthcare agreement between your home country and Australia (currently in place in Finland, Ireland, Italy, the Netherlands, New Zealand, Norway, Sweden and the UK – but check before travelling), or by a private health insurance scheme, although you should check exactly what this entitles you to. If you aren’t adequately insured, you could be faced with some extremely high medical bills. When deciding on the type of policy, ensure that the insurance scheme covers all your family’s health requirements. Make sure you’re fully covered in Australia before you receive a large bill.
Health insurers offer two basic types of insurance: hospital and ancillary. Hospital cover contributes to the cost of in-hospital treatment and accommodation as a private patient in a private or public hospital.
Ancillary cover contributes to the cost of out-patient medical services that aren’t covered by Medicare, such as acupuncture, chiropractic and other alternative therapies, dental treatment, physiotherapy, and spectacles or contact lenses. Ancillary insurance may also include ambulance cover, home nursing and other services, although there’s usually no refund for X-rays or prescriptions. There are payment limits for ancillary cover, both per visit limits and annual limits. Some funds (e.g. HCF) have a ‘fit and well’ policy which pays for gym membership or sports equipment such as running shoes.
Each state has its own private health insurers, the largest of which include the Hospital Contribution Fund (HCF), Medibank Private, the Medical Benefit Funds (MBF) and National Mutual Health Insurance. By far the largest insurer is Medibank Private ( www.medibank.com.au), a non-profit health benefits organisation (established in 1976) operated by the state-run Health Insurance Commission, covering some 3 million people (one third of all those with private health insurance), with some 100 customer service centres throughout the country. Medibank Private also provides cover for temporary residents of Australia who aren’t eligible for Medicare benefits. It’s possible to obtain health insurance from some banks, although they may insure only high earners. Compare the benefits and costs provided by a number of health insurers. Most provide a choice of basic, intermediate and comprehensive cover, with intermediate and comprehensive levels.
For more on expat health, health insurance and related issues in Australia, visit our expat health blog at ExpatHealth.org.
Premiums vary considerably according to the state or territory. The average cost of 100 per cent hospital cover for a family is around $1,600 and the average cost of 100 per cent ancillary cover around $1,150. The average costs for a single person are $750 or $875 (depending on the level of cover) for hospital cover and $575 for ancillary cover. Premiums vary little between couples, families and single-parent families, who all pay around double the single premium. Premiums can usually be paid monthly, quarterly or annually, and a discount may be given for prompt or annual payment. Alternatively, you can pay on a weekly or fortnightly basis through deductions from your pay packet.
Extra Costs & Excess Charges
The benefits (rebates) provided by health insurers aren’t usually 100 per cent and you normally need to make a contribution (an excess or co-payment) towards fees, called ‘out-of-pocket’ costs. These can be very high and can run into $hundreds or even $thousands (and can increase at short notice). If you want your own doctor to treat you in a public hospital, you must pay a daily accommodation charge, and some insurers levy a fee per night (e.g. $80) for private hospital patients. In addition to out-of-pocket costs, there’s also usually an annual excess charge, which can be up to $2,000 for a family and may be applied per person for a couple. When you leave hospital, you’re generally asked to pay the difference (if any) between your health insurer’s refund and the hospital’s fees. High out-of-pocket expenses are the main reason people have abandoned private health insurance in recent years.
All funds have waiting periods before new members are eligible to make a claim, e.g. a general two-month wait for all treatment, nine months for obstetrics (i.e. you cannot join when pregnant and claim for the costs against your insurance) and one year for existing conditions. This is to prevent you from making a claim directly after joining and then dropping your membership. However, accidents are covered from the day you join. Before changing funds, always check the waiting times for treatment, particularly if you have existing health problems. If you already belong to a private health insurance scheme (such as BUPA in the UK), you may be able to transfer your membership to Australia, in which case you won’t be subject to waiting lists. Some insurance companies offer a short-term scheme for people staying in Australia for a limited period.