Time to read : 4 Minutes
I am 35 and I have finally decided to pull the trigger on health insurance.
I’m not sure why it’s taken me this long to commit. When I was 19, a nerve disorder saw me undergo brain surgery, but I was still on my parent’s cover so I didn’t have to worry. Then I experienced several (lucky) years where I was incredibly healthy. I was also a uni student with very little spare funds to take out my own policy.
Over the past five years, my fortunes changed. I spent two years on a waitlist for surgery through the public system, I’ve had to pay for a number of scans and tests, and my six- day-a-week gym habit has resulted in more than one injury I’ve needed physio for.
Then of course there are the tax implications. Because of the Lifetime Health Cover (LHC) loading, you’re penalised for every year you wait to take out private health insurance after 31. I have already reached an 8% loading due to my dilly-dallying.
This is all to say, I’ve decided it’s time to get serious. Or, at least, my tax agent has strongly suggested I get serious.
💡 LHC loading is a surcharge introduced by the government to encourage Aussies to have private hospital cover. The loading applies if you don’t take out hospital cover before 1 July after turning 31. It starts at 2% and increases by 2% for each year you don’t have private hospital cover, to a maximum of 70%. For example, if you take out private hospital cover at the age of 40, your LHC loading will be 20%. (2% x 10 years). In short, the longer you leave it, the more expensive it becomes! Learn more about LHC loading.
From feeling overwhelmed to relieved
I saw my tax agent in November last year, mentally committed to getting health insurance, and then proceeded to do nothing for months. I saved a lot of promotional emails in a folder I never looked at, and I glanced up from my phone whenever a health insurance ad came on TV.
But there was a distinct lack of action because I was so overwhelmed by the options. Luckily I know where to go to speak to a professional.
Eli Boroda is one of the Senior Health Insurance Brokers at Compare Club and has spent the past eight years helping Aussies find the right cover. We get off to a slightly rocky start when I couldn’t quite remember how old I am (age blindness hit me after 30), but he’s able to calculate it for me. Already doing better than I would alone!
It’s good that we’re talking over the phone, Eli says, because he’s able to give me the info on the loading I’ll be paying which isn’t reflected in the online comparisons. He can also calculate the government rebate I am eligible for.
He runs me through the initial options. Eli doesn’t recommend we go with a basic level of cover, as I’m unlikely to find anything I need to claim covered. So we run through the gold and silver inclusions to be sure I won’t need any of them before we settle on a bronze level of cover. It’s important to note you need to have a certain level of cover to subsidise the Medicare Levy.
Health insurance insider tips I now know
Eli takes me through some facts about health insurance that I had no idea about as a first-timer.
You can increase or decrease your cover at any time if your circumstances change. There is usually a wait period – 12 months for a pre-existing condition – but you should have enough notice to increase your cover before this becomes an issue.
Most insurers provide accident cover in their hospital policies, so if you’re involved in a car crash for example and need spinal surgery, this may still be covered. You don’t always need to plan for the unknown.
Extras by themselves don't exempt you from Lifetime Health Cover (LHC) loading or the Medicare Levy Surcharge – you would need hospital cover.
Choosing extras to add to your cover
When we get into extras I have no idea what I want to include. I feel I should have dental because I haven’t seen a dentist since I got my Invisalign off several years ago, and I’m hoping a monthly health insurance bill will keep me accountable for twice-yearly dental checks.
I also know my body and I’m quite likely to experience another gym-related injury which will need massage or physio.
We land on physiotherapy, chiropractic, osteopathy, remedial massage and general dental as my extras, with the potential to add more in later if I need them.
Eli reminds me I have a 2-month wait period for new claims and we both agree I won’t go bungee jumping or rock climbing until I’m in the clear. (In case my new health insurer is reading this, I absolutely do not plan on doing either. I struggle standing near the windows in my office building).
There’s no escaping the fact my outgoings will increase now I’m paying for health insurance. Eli coaches me to think of the extra spend practically. I’m already paying for the dentist, a massage therapist, or physio.
At tax time, I’m being penalised, and that will continue to increase the more I earn. So while I won’t be getting everything I spend on health insurance back each year, I will be getting discounts on those extras I use, and I’ll have peace of mind knowing I won’t need to sit on a surgery waitlist for two years again.
At the end of our call, Eli signs me up for the policy we agreed on and runs me through legal bits. He’ll sort out all the paperwork and my new insurer will be in touch. Job done in less than 30 minutes.
Bottom line
I proudly let my inner circle know that I’ve got health insurance now. One of my friends admits his partner is also in the “overwhelmed” holding pattern, unable to work out what extras he should be paying for. I quickly recount my own experience and tell him this is one of those things a professional can help with.
Choosing the right health insurance can be tricky and daunting but just remember the longer you wait after the age of 31, the bigger the loading.
Take it from my experience – the process isn’t as hard as you think it’s going to be and it’s worth turning to the experts!
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Disclaimer
Any health or financial advice is general in nature and does not take into consideration your circumstances. Always check with a financial or health professional before making any decisions.
