We received an advisory from our health insurance provider last week, informing us that there would be an increase in our monthly premium. From $99.30, it will be increased to $107.15, a 7.95% jump. Makes me wonder sometimes if health insurance is really worth having.
In our case, we first signed up for health insurance after we were slugged with the Medicare levy surcharge the previous year. Depending on your income, you may be liable to pay a 1% surcharge if you do not have private health insurance. This is in addition to the 1.5% Medicare levy paid by resident taxpayers to help fund the government health scheme, Medicare.
We thought the money we paid for the surcharge was money down the drain since we didn’t really get any benefit from it. It certainly felt like we were given the stick in this carrot-or-stick approach. And if you think that the carrot may not be a good enough reward for you to sign up for health insurance, there’s also the 30% rebate on private health premiums offered by the federal government to sweeten the deal.
As if that is not enough reason, we also learned about the Lifetime Health Cover initiative where people who delay taking out hospital cover will pay a 2% loading on top of their premium for every year they are aged over 30 when they first take out hospital cover! I was fast approaching my 30th birthday then so we had to quickly join a health fund to avoid this extra cost.
Taking all these into account, we could have chosen the most basic health cover just to avoid the Medicare levy surcharge. However, we reasoned that we might as well get a product that would suit our needs. We pored over the brochures from different providers, read the information on their websites, learned about excesses and co-payments and finally decided on a provider and got intermediate (comprehensive cover is way too expensive!) cover for both of us. End of story? No, not really.
We signed up for private cover in Canberra (ACT) then moved interstate to Melbourne (VIC) July last year so we had to inform the health care provider of our change of address. We were surprised to learn that the same coverage costs more here! Not sure as to why this is the case but I imagine it has something to do with differing costs of living between the states. As it is, here’s a comparison of the premiums for the same health cover for the various states within Australia.
| State | Premium |
| NT | $89.95 |
| TAS | $93.15 |
| WA | $94.35 |
| NSW/ACT | $96.30 |
| QLD | $102.20 |
| VIC | $107.15 |
| SA | $109.20 |
Anyway, the impending increase in premiums have brought our attention to the need of re-evaluating our coverage again. Our present coverage has minimum benefits for obstetrics and as there is a one-year waiting period for this benefit to take effect, we might upgrade to a better plan now in preparation to starting a family soon. But then again, are we better off just staying with our current coverage and provider then opt to go to public hospitals for the other stuff? At this point I still don’t know, I’m going over the recommendations from a free service provided by iSelect but the different products from several providers are starting to look more and more the same as time goes by. Maybe inertia would win this battle after all.
