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Private insurance vs public system

Should you supplement the public system with additional private health insurance  16000646 800525996 0 0 14095116 300

In Australia, you can choose to have your health insurance covered under the public system Medicare, or alternatively, under private health care.

Here is a rundown on what each kind of insurance covers and the differences between them.

Medicare - what is covered

This type of health care covers many medical costs and you can choose to have this option alone or to supplement what it covers with additional private insurance.

There are three parts to this types of insurance - hospital, medical and pharmaceutical.

Under this system, you can be treated in a public hospital as a patient at no charge. However, you will not be able to choose your own doctor and often you will have no choice about when you will be admitted to hospital.

You will not receive cover for any private care or ambulance services. If you decide to go overseas and you incur medical or hospital costs, those fees would not be covered. In addition,  any medical or hospital services deemed not clinically necessary or purely for cosmetic reasons would not be covered.

Outside of hospital, the medical benefits include cover for 100 per cent of the Medicare Benefits Schedule (MBS) fee when you go to your general practitioner and 85 per cent of a specialist's fee.

Medicare does not include all doctors' services, but items such as consultation fees, tests and examinations required to treat certain illnesses are usually part of the package. Eye tests performed by optometrists and most other surgical or therapeutic procedures are also covered.

Some surgical procedures by approved dentists are also included in this scheme, however most dental examinations and treatment will not be covered.

The Pharmaceutical Benefits Scheme (PBS) means you only need to pay for part of the cost of your prescriptions when you purchase them at a pharmacy.

The remaining cost is covered under the scheme. However, in order to obtain this benefit, you will need to present your Medicare card.

There is an annual threshold determining the amount you will need to pay for medication over the course of a year, which means towards the end of the calendar year your medical bills may cost you less.

People with concession cards will have a lower maximum payment and it is worth noting that the amount you need to pay will depend on the medicine you are purchasing.

Private healthcare

If you decide to opt for a higher level of cover, there are three optional extras to consider, as private health care is divided into different sections.

Hospital cover gives you the chance to choose your own doctor and to be treated at a private hospital if you choose. You may also be able to decide when you would like to be treated, rather than spending time on public waiting lists until a spot opens up.

Since Medicare will cover 75 per cent of your associated medical costs, you will only need to obtain an additional 25 per cent from your private healthcare insurance.

Something to bear in mind is that your doctor can decide the amount he or she will charge for the services provided and this may also include the costs of diagnostic tests, pharmaceuticals, hospital accommodation, intensive care, theatre fees, drugs, dressings, prostheses (if they are surgically implanted) and any other additional doctor's fees.

General treatment cover is another extra to consider. It provides cover against the cost of some ancillary health service providers and may include dental treatment, glasses and contact lenses, prostheses (such as hearing aids), home nursing, chiropractic treatment, physiotherapy, occupational, eye and speech therapy.

While most services are included, it might pay to read through your policy as some options are only covered to a limited extent and certain limits may apply, such as the number of times you can access a certain service each year.

Ambulance cover is another insurance option, as Medicare does not cover the cost of this service. You can choose this as a stand-alone option or combine it with general or hospital cover - it is up to you.

Government rebate on private health insurance

If you are eligible for Medicare and are a member of a certain health care fund, you might be entitled to a rebate on the cost of your health insurance premiums, which will reduce the amount you need to pay.

This number will take into account the age of the oldest person covered by the policy and  the annual earnings of your household.

Posted by Richard West.