Is Health Insurance That Expensive?

Sep 17

The average Australian knows very little about health insurance and what to look for in comparing health insurance. He may have decided to purchase additional private health insurance, and in so doing would join the 46% of the population so covered. But he is uncertain about the costs involved and what the financial implications are for him and his family.

When this average Australian starts looking around for health insurance and starts researching what is available to him, he will find that, according to the Government, there are around 35 registered health insurers. Most of them provide a whole range of different products, which could include maternity benefits, cover for joint replacement, cover for the disabled, and so on: with all sorts of extras such as private rooms, additional ambulance cover, and wellness products. All of these costs, so the potential customer needs to weigh up what he most needs, and the costs, before making a decision. They may make a prayer for good health, hoping for some health insurance that is potentially low cost and possibly covers their basic costs.

Comparing health insurance is no simple task, as can be seen from the previous paragraph. If one wants to compare one’s health expenditure with others, to see whether one’s spending is in line with that of the average, one can look at the following statistics from the Australian government:

  • In February 2012, the full-time adult total earnings were $1,404.90 per week.
  • The average household expenditure on healthcare was $65.60, which comprised:
    • 40% of this was for accident and health insurance
    • 29% went on health practitioners’ fees
    • 27% on medicines, pharmaceutical products and therapeutic appliances
    • The balance was spent on hospital and nursing homes.

Sometimes of course, a household will pay relatively more for their health care, including their health insurance, because of particular health needs: this might be unavoidable.

The cost of private health insurance is supported by the government: in recent years there has been tax relief for health insurance, so as to support the services supplied by Medicare. This also needs to be taken into account when looking at the financial aspects of health insurance.

When one weighs up the financial implications of any purchase, one has to look at the innate value of that purchase to you as an individual or a family. allowed us to weigh several options for private health insurance; meanwhile, some people will spend what might seem to others to be an inordinate amount of money on collecting things, on music or sports equipment, or motor bikes. What you spend your money on is very personal. But there is one thing that is a definite: your health is essential to you, for without it you cannot enjoy any of the other things in life. And for most of us, our health is fundamental to earning an income. So, when weighing up the costs of health care, you cannot look at that expenditure without taking into account what your life would be like if you did not take good care of your health.

You also need to look at the financial implications to your family of the breadwinner/s not being able to earn for a while because of ill-health. Would you need to take out additional insurance of another kind? If this is the case, then when you are comparing health insurance costs, you need to look at this additional cost that you might need to incur, and decide which would be the most sensible type of insurance to buy.

Your and your family’s health profiles are important when weighing up the different health insurance options available. If there is a history of heart disease in the family it may be wise to spend a bit more on a hospital package which covers heart surgery.

This might help give you some direction when trying to decide whether to purchase health cover, and you compare one health insurance choice with another.